Investor interest in Nvidia (NVDA) is growing rapidly. And that enthusiasm is spreading to other stocks the chipmaker owns.
The massive chipmaker had holdings in the stocks of SoundHound AI (SOUN), Arm Holdings (ARM), and the biotech startup Recursion Pharmaceuticals (RXRX) as of December 31, 2023, according to a disclosure made public by the SEC on Wednesday night.
The news caused all three of the AI-related stocks to jump. Arm’s stock rose by more than 6% on Thursday afternoon. The firm had previously had its shares surge by more than 80% in the previous month after attributing its higher-than-expected revenue predictions to the company’s AI projects. Shares of Recursion jumped by about 15%.
A smaller business focused on voice AI and speech recognition, SoundHound, had a significant increase over the same period. When the market opened, the stock was poised for its greatest day ever, rising by about 80% before retreating to a final gain of nearly 60% on Thursday afternoon.
However, the significant increase in SoundHound’s price, which had fallen by over 40% in the previous year, confirmed the market’s enthusiasm for Nvidia and other companies connected to the chipmaker.
As a result of the surge in demand for the company’s AI-powered chips, revenue has surged dramatically over the past year. Nvidia generated $18.12 billion in revenue for the third quarter, which is 206% more than it did a year earlier. On February 21, the firm will release its quarterly report.
Senior stock analyst Dan Ives of Wedbush Securities stated that Nvidia’s investments are a vote of confidence from CEO Jensen Huang, dubbed the “Godfather of AI,” and it can have a big impression on investors.
In a note on Thursday morning, Ives wrote, “We view this as a positive indicator for [SoundHound] as this investment now further solidifies the company’s brand within the AI Revolution.”
Nvidia held a nearly $3.67 million stake in SoundHound as of December 31. Its respective holdings in Arm and Recursion came to slightly over $147 million and $75.9 million.
