Investors can’t get enough of Nvidia (NVDA). Now, the company is spreading that love to other stocks.
On Wednesday night, an SEC filing revealed the chipmaking giant held investments in the stocks Arm Holdings (ARM), SoundHound AI (SOUN), and biotech company Recursion Pharmaceuticals (RXRX) as of Dec. 31, 2023.
All three of the AI-related stocks popped on the news. Arm, whose stock was already up more than 80% in the last month after the company attributed its better-than-expected revenue expectations to AI initiatives, saw was up more than 6% on Thursday afternoon. Recursion’s stock rose almost 15%.
Meanwhile, SoundHound, a smaller player that specializes in voice AI and speech recognition, saw a huge gain. The stock was on track for its best day ever at the open, popping about 80% before paring gains to nearly 60% on Thursday afternoon.
Still, the massive price move in SoundHound, which had been down more than 40% over the last year, reaffirms market enthusiasm for Nvidia and other names associated with the stock.
Nvidia shares are up nearly 50% since the start of 2024 and more than 220% in the past year. The company’s market cap — which stood at $1.8 trillion as of Thursday midday — recently surpassed that of Amazon (AMZN) and Alphabet (GOOG, GOOGL). Only Microsoft (MSFT) and Apple (AAPL) now have a higher valuation than Nvidia.
The company’s revenue has increased significantly over the past year as demand for its AI-powered chips has soared. In the third quarter, Nvidia reported revenue of $18.12 billion, up 206% from a year ago. The company is set to report quarterly results on Feb. 21.
Wedbush Securities senior equity analyst Dan Ives said that Nvidia’s investments signal a stamp of approval from the “Godfather of AI,” CEO Jensen Huang —and that can go a long way with investors.
“We view this as a positive indicator for (SoundHound) as this investment now further solidifies the company’s brand within the AI Revolution,” Ives wrote in a note on Thursday morning.
As of Dec. 31, Nvidia had a nearly $3.67 million stake in SoundHound. Meanwhile, its stakes in Arm and Recursion totaled just over $147 million and $75.9 million, respectively.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance