Nvidia is making substantial investments in two unacknowledged AI-related stock holdings.
Tech Giant Nvidia Invests in Two AI Stocks
Artificial Intelligence (AI) has emerged as a prominent growth theme in the stock market and appears to be a significant part of the industry's future. Despite the heightened anticipation, experts anticipate the full potential of AI to manifest over the coming years.
Nvidia, a preeminent player in the AI industry, has shown remarkable expertise with its high-performance chips, providing the essential infrastructure for AI technologies such as speech models and autonomous driving. The tech conglomerate recently disclosed that it had taken new stakes in two lesser-known AI companies in the final quarter of 2024, investing in millions of shares of Nebius Group and 1.7 million shares of WeRide.
Nebius Group: An AI Cloud Infrastructure Provider
Based in Amsterdam, Nebius Group focuses on supplying powerful GPU clusters and developer tools for demanding AI applications within AI cloud infrastructures. Since its Initial Public Offering (IPO) in October 2024, Nebius' stock has skyrocketed nearly 130% and climbed 20% year-to-date. However, the company remains unprofitable, with revenue plummeting over 98% in the last fiscal year. Despite its current financial state, analysts forecast revenue to surge by 400% in the new fiscal year. The majority of analysts recommend purchasing the stock, with an upside potential of 14% at $51 USD.
WeRide: A Leading Player in Autonomous Driving Technologies
WeRide, a leading Chinese company specializing in autonomous driving technologies, develops autonomous robotaxis, robobuses, and other autonomous vehicles. Similarly to Nebius, WeRide has seen remarkable growth since its IPO in October 2024, with its stock rising over 50% and 70% year-to-date. Most of this increase transpired in mid-February after Nvidia's stake was publicly announced, resulting in a notable spike in the stock's value. Much like Nebius, the majority of analysts currently recommend purchasing the stock, although the current average price target of $21 USD signifies a downside potential of 14%.
WeRide reported a decline in revenue of 12% in the previous fiscal year, but analysts expect a 190% increase in revenue for the new fiscal year. Like Nebius, this company remains unprofitable. With a beta of 3.94, the stock is considered extremely risky, yet WeRide has potential through its expansion plans in Europe. In January 2025, the company announced the deployment of its autonomous robobus shuttle at Zurich Airport, marking the first commercial autonomous bus shuttle project at a European airport.
Nvidia Maintains Its Investments in Other AI Stocks
Nvidia's investments in Applied Digital Corporation and Recursion Pharmaceuticals remained constant. Applied Digital Corporation offers digital infrastructure for AI and high-performance computing, with its stock surging 30% year-to-date and over 70% on a one-year view. The majority of analysts encourage purchasing the stock and predict around 30% upside potential with an average price target of $13 USD. Recursion Pharmaceuticals' stock has increased 30% since the beginning of the year, but most analysts currently advise holding its shares and foresee an average price target of $10 USD, indicating an 11% upside. Recursion Pharmaceuticals differentiates itself through its utilization of artificial intelligence to expedite drug development, a traditionally time-consuming and costly process.
In conclusion, Nvidia is investing in burgeoning AI companies, with Nebius and WeRide being two noteworthy targets. While both companies boast high growth potential, they are currently unprofitable and carry significant risks. Whether these investments will prove lucrative in the long run remains unknown, but it's evident that Nvidia recognizes potential in these AI stocks, making them worth keeping a close eye on.
Those interested in AI might also find the award-winning Artificial Intelligence Index by Börse Online intriguing, as it invests in some of the industry's top candidates.
Nvidia's recent investments in Nebius Group, an AI cloud infrastructure provider, and WeRide, a leading autonomous driving technologies company, demonstrate the tech giant's commitment to expanding its portfolio in the AI sector. As both Nebius and WeRide show promising growth potential, they are likely to attract further attention from investors, with their stock prices at $51 USD for Nebius and $21 USD for WeRide, as suggested by most analysts.
