Nvidia (NASDAQ: NVDA), a leader in graphics processing units (GPUs), is making waves in the technology sector as its stock continues to gain traction amid a bullish market sentiment. Investors are increasingly viewing Nvidia as a proxy for the burgeoning artificial intelligence (AI) industry, with the company’s stock representing a direct investment into the future of AI. With an impressive investment portfolio valued at approximately $305 million, Nvidia is not just a player in the AI space but is actively shaping its future by investing in other AI-centric companies.
At the end of Q4 2024, Nvidia's secret stock portfolio consisted entirely of five AI stocks, showcasing its commitment to the technology's growth. The largest position in this portfolio is Arm Holdings (NASDAQ: ARM), where Nvidia owns 1.1 million shares valued at $135.9 million. Arm Holdings is pivotal in the mobile industry, powering 99% of smartphones with its energy-efficient architecture. Its licensing model, which generated $3.7 billion in trailing revenue—a 14% increase from the previous year—positions it as a key player in the AI market.
Following Arm is Applied Digital (NASDAQ: APLD), a data center company that heavily relies on Nvidia’s GPUs. Nvidia holds 7.7 million shares of Applied Digital, worth $59 million at the end of Q4. The company recently reported a staggering 54% revenue increase in its fiscal second quarter, reaching $64 million. With a $5 billion financing deal inked with Macquarie Asset Management, Applied Digital is targeting a capacity expansion of 2 gigawatts by 2027, indicating a robust growth trajectory.
Another notable investment is Recursion Pharmaceuticals (NASDAQ: RXRX), where Nvidia invested $50 million two years ago through a private investment in public equity (PIPE) deal. Recursion utilizes AI for drug discovery, aiming to streamline the lengthy and costly processes traditionally involved in this field. Nvidia’s stake in Recursion amounts to 7.7 million shares valued at $52.1 million.
Nebius Group (NASDAQ: NBIS) is also part of Nvidia’s portfolio, focusing on the GPU-as-a-service and AI cloud market, which is projected to grow to over $260 billion by 2030. Nvidia participated in a $700 million private placement for Nebius, alongside other investors, to bolster the development of AI infrastructure.
Lastly, Nvidia has invested in WeRide (NASDAQ: WRD), a leader in the autonomous vehicle (AV) sector in China. Nvidia owns 1.7 million shares valued at $24.7 million. The company has a presence in 30 cities across nine countries and is looking to expand further into Japan, Europe, and the Middle East. Nvidia estimates that the AV market represents a long-term opportunity worth $300 billion.
Despite the promising outlook, Nvidia's stock recently experienced a drop of 4.92%, trading at $96.79 on April 4, 2025. This decline comes amid a broader market sell-off, but analysts suggest that it may present a significant buying opportunity. The average target price for Nvidia stock is currently around $190, with some analysts projecting even higher targets. For instance, Rosenblatt maintains a Buy rating with a target price of $220, while Cantor Fitzgerald has downgraded its rating to Overweight with a $200 target.
Moreover, Benzinga's options scanner highlighted significant activity in Nvidia options, revealing that 51% of heavyweight investors are leaning bullish, while 37% are bearish. This mixed sentiment reflects a broader uncertainty in the market but also highlights the potential for substantial movements in Nvidia's stock price, particularly with its upcoming earnings announcement expected in 47 days.
Nvidia's CEO, Jensen Huang, recently outlined several catalysts that could accelerate the company’s growth during the annual GPU Technology Conference (GTC) held in March 2025. Huang emphasized the increasing demand for GPUs, particularly for new AI models that require significantly more computing power than their predecessors. He noted that reasoning models, which are becoming the standard for AI applications, require GPUs to be ten times faster to meet the growing demands of developers.
At the GTC, Huang revealed that the top four providers of cloud infrastructure services have already ordered 3.6 million Blackwell GPUs, nearly three times the number of previous-generation Hopper chips ordered last year. This surge in demand underscores the critical role Nvidia plays in the AI landscape, with Huang predicting that AI infrastructure spending will exceed $1 trillion annually by 2028.
As Nvidia continues to innovate, its data center business has already generated $115.2 billion in revenue for fiscal 2025, marking a 142% increase from the prior year. This growth is indicative of the company's strong position in the market and its ability to capitalize on the rapid expansion of AI technologies.
With Nvidia's stock currently trading at a price-to-earnings (P/E) ratio of 36.9, analysts suggest that it is at its most attractive valuation in three years. Wall Street consensus estimates predict an earnings per share (EPS) of $4.53 for fiscal 2026, suggesting that the stock has significant upside potential. Investors are encouraged to look beyond the immediate fluctuations in stock price, as Nvidia’s long-term prospects appear robust.
In summary, Nvidia stands at the forefront of the AI revolution, leveraging its investments and innovations to secure a leading position in the market. As the demand for AI technologies continues to soar, Nvidia's strategic investments and advancements in GPU technology are likely to drive substantial growth in the coming years, making it a compelling option for investors looking to capitalize on the future of AI.
