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NVIDIA's Latest Holdings | Which of the 6 Major AI Companies Has the Most Growth Potential?

NVIDIA's latest investment landscape has just been unveiled. According to NVIDIA's 13F filing with the SEC, as of the end of Q1, the company hold stakes in 6 companies:

Data center operator $CoreWeave (CRWV.US)$ , chip design giant $Arm Holdings (ARM.US)$ , data center operator $Applied Digital (APLD.US)$ , AI healthcare company $Recursion Pharmaceuticals (RXRX.US)$ , data center operator $NEBIUS (NBIS.US)$ , and autonomous driving company $WeRide (WRD.US)$. 

As a global leader in AI computing power, NVIDIA's capital deployment is becoming a strategic indicator for tech industry development.

The market believes NVIDIA's investment decisions are based on a deep understanding and foresight of AI technology development, often representing industry trends. Companies receiving NVIDIA's investment may enjoy multiple benefits such as technical support, chip supply, and ecosystem resources.

So, among these 6 AI companies invested by NVIDIA, which ones have long-term investment value? Who has the most growth potential? 

~CoreWeave: Closely aligned with NVIDIA, possessing outstanding large-scale computing cluster management capabilities

$CoreWeave (CRWV.US)$ started with cryptocurrency mining in 2017, accumulating a large number of GPUs through its predecessor Atlantic Crypto. After the cryptocurrency price crash, the company began exploring transformation, acquiring second-hand GPUs at low prices and shifting towards providing high-performance computing rental services for AI, film, and other fields.

In 2022, ChatGPT's launch ignited a global AI wave. CoreWeave quickly rose to prominence with its Bare Metal GPU model and strong computing power supply capabilities. In 2023, it established a deep partnership with NVIDIA and attracted major clients including OpenAI, Meta, and Microsoft. By fully committing to computing power rental, it has become one of the most influential AI core infrastructure providers in North America.

CoreWeave owns 32 data centers, operating over 250,000+ GPUs, mainly serving major North American clients such as Microsoft, NVIDIA, OpenAI, Meta, and Google. CoreWeave focuses on GPU-centric computing power rental services, meeting clients' rapidly growing computing needs while increasing their capital expenditure flexibility.

NVIDIA's preference for CoreWeave has reached the level of "treating it as its own" - after receiving NVIDIA's investment, CoreWeave became NVIDIA's direct cloud computing power supplier, with even Microsoft ordering cloud computing power from them.

Moreover, according to recent reports, CoreWeave has reached an agreement worth up to $4 billion with AI company OpenAI, lasting until 2029, to provide additional cloud computing capacity.

Notably, Microsoft is one of OpenAI's biggest backers and also CoreWeave's most important client. According to documents filed with the SEC, Microsoft is one of CoreWeave's two major clients for 2024, contributing nearly two-thirds of total revenue. Expanding cooperation with OpenAI may help CoreWeave reduce the risk of over-reliance on Microsoft.

~ARM: A giant in the semiconductor IP field

$Arm Holdings (ARM.US)$ is a chip company that doesn't make chips, generating revenue by selling chip architecture licenses. Specifically, ARM has two main profit models: one is the upfront license fee model, accounting for 40% of total revenue; the other is the royalty fee model, accounting for 60% of total revenue.

The license fee model refers to other companies paying a one-time authorization fee when using Arm's architecture to design chips, mainly reflecting the value of Arm's technology and market demand.

The royalty fee model is where chip manufacturers pay Arm a percentage of their sales after producing chips using Arm's architecture, based on the shipment volume of partners' products, mainly reflecting the sales and market share of partners' products.

Among these, royalties are Arm's most profitable business, yet pricing is not high. This is an important reason why its market share is as high as 99%, but its revenue and profit scale are not particularly large.

~Applied Digital: Data center solutions provider

$Applied Digital (APLD.US)$ , founded in 2001, is a U.S. company focused on designing, building, and operating next-generation digital infrastructure and high-performance computing data centers. APLD mainly provides data center hosting, cloud services, and high-performance computing hosting solutions to meet the computing-intensive application needs of mining, AI, ML, etc. Relying on advanced NVIDIA GPU technology and innovative cooling systems, it ensures customers can obtain efficient, scalable, and secure computing support.

NVIDIA's investment in Applied Digital further demonstrates its deep involvement in the AI infrastructure sector. 

~Recursion Pharmaceuticals: AI drug development leader

$Recursion Pharmaceuticals (RXRX.US)$ is a clinical-stage biotech company focused on accelerating drug development using AI technology. The company is committed to drug discovery, precision medicine, rare disease treatment, oncology, and neuroscience with AI technology.

According to media reports, its data and computing power are very impressive. In 2024, the company's supercomputer BioHive-2 made its debut, dubbed the largest supercomputing system in the pharmaceutical industry. NVIDIA's powerful computing capabilities can provide computational support for its AI drug development.

The company focuses on using computer vision and machine learning algorithms to analyze cell image data to identify potential therapeutic effects. By building a vast biological image database and training deep learning models to predict the effects of compounds on cells, RXRX can quickly screen potential new drug candidates. 

~NEBIUS: Benefiting from European support for AI

$NEBIUS (NBIS.US)$ was formerly the Russian tech giant Yandex, with businesses spanning search, maps, ride-hailing, music, and streaming. After the Russia-Ukraine conflict in 2022, Yandex faced geopolitical upheaval and initiated strategic restructuring to exit the Russian market. In October 2024, Yandex and Nebius completed the official spin-off. 

Nebius offers full-stack AI solutions, including Nebius AI Cloud providing various development tools, Nebius AI Studio supporting model testing, and other services such as data labeling purchase, personnel training, and autonomous driving technology. 

Nebius data centers are located in multiple locations across Europe and America, with a diverse customer base consisting of large AI training labs, startups, and enterprise internal AI teams. Nebius's business structure is more complex than CoreWeave's and more cautious in terms of capital expenditure.

~WeRide: The world's first Robotaxi stock

$WeRide (WRD.US)$ focuses on autonomous driving technology and is a leader in this field. WeRide uses NVIDIA's advanced GPUs and AI software to power its vehicles and currently operates autonomous taxis in multiple cities.

WeRide's revenue mainly comes from two parts of the business: sales of L4 autonomous vehicles such as Robotaxis, Robosweepers, and related sensors; and providing L4 autonomous driving and ADAS assisted driving services, such as operation and technical support, ADAS R&D services, etc.

NVIDIA is an early investor in WeRide. WeRide's rise from its L4 origins is inseparable from the support of a group of star investors: Xpeng Motors founder He Xiaopeng, IDG, and later received olive branches from industry giants such as Renault-Nissan-Mitsubishi Alliance, NVIDIA, Bosch, and Uber.

Additionally, it's worth noting that recently Uber has committed to an additional $100 million equity investment in WeRide on top of its existing investment. Insiders revealed that this investment will be completed in the coming months. Reportedly, this is Uber's largest investment in the autonomous driving field to date.

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