Stocks and stock market news you need to watch every Monday morning in the Eastern Region and Nation I highlighted four stocks in June. Nvidia invested $600 million in companies because Nvidia is accumulating a pile of cash that it needs to invest.One of those stocks is now up 78% over a 5 month period, and the investment serves another purpose for NVIDIA more than just returns. Just this month the company disclosed another update and bought two more stocks. I’m going to highlight those six stocks to buy before Nvidia buys them, as well as Dell Technologies SMCI’s important update and what may be the most underrated opportunity after the election, but first and foremost, investors are loving options investing with nearly 40 million contracts trading each day to enhance their returns, but most investors are doing it wrong and losing over $5 billion a year.
Nvidia’s Strategic Moves: From Cash Reserves to AI Dominance
Nvidia has been making headlines with its incredible revenue growth and market dominance in artificial intelligence (AI) chips. Here’s a snapshot:
- Revenue Surge: Nvidia’s revenue increased 94% year-over-year and 177% quarter-over-quarter.
- AI Market Share: Nvidia controls an estimated 95% of the AI chip market, showcasing unprecedented dominance.
- Cash Reserve Challenge: Nvidia’s cash reserves have swelled to $38 billion, up 48% since January 2024, raising questions about effective deployment.
Addressing Semiconductor Cyclicality with Investments
Despite the ongoing AI supercycle, Nvidia recognizes the cyclical nature of the semiconductor industry. To mitigate risks, the company is channeling its cash reserves into investments in other companies, fostering growth in the AI ecosystem.
Nvidia’s Top Investments: Stocks to Watch
Nvidia’s recent 13F filings reveal its strategic investments in several companies. Here’s a closer look at the highlights:
1. Arm Holdings (Ticker: ARMM)
- Investment: 1.9 million shares worth $263 million
- Performance: Shares are up 128% in the past year.
- Role: Arm designs microprocessor architecture essential for semiconductor production, making it a critical supplier in the chip ecosystem.
2. Nano-X Imaging (Ticker: INNX)
- Investment: 60,000 shares worth $381,000.
- Focus: AI-powered CT imaging systems for early disease detection.
- Performance: Shares have faced volatility but remain up 3.6% over the year.
3. Recursion Pharmaceuticals (Ticker: RXRX)
- Investment: 7.7 million shares worth $45 million.
- Mission: Using AI to accelerate drug discovery.
- Performance: Shares are down 26% since June, reflecting biotech sector challenges.
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4. SoundHound AI (Ticker: SOUN)
- Investment: 1.7 million shares worth $14.3 million.
- Innovation: Leader in conversational AI, powering voice assistants in multiple languages.
- Performance: Shares are up 78% since June, driven by significant partnerships.
5. Applied Digital (Ticker: APLD)
- Investment: 7.7 million shares worth $75 million.
- Focus: Building AI-specific data center infrastructure.
- Performance: Shares are up 118% in the past year, reflecting strong growth potential.
6. Serve Robotics (Ticker: SRV)
- Investment: 3.7 million shares worth $31.6 million.
- Highlight: Nvidia owns 88.4% of this sidewalk delivery robot company, signaling confidence in autonomous delivery solutions.
The Broader Market: Cybersecurity, Data Centers, and Healthcare
Cybersecurity Stocks to Watch
CrowdStrike (Ticker: CRWD): Earnings report due, with 25% revenue growth expected. Shares have rebounded 71% from their lows.
Dell Technologies (Ticker: DELL): Positioned to benefit from data center expansion, competing with Super Micro Computer (SMCI).
Healthcare Stocks Gaining Momentum
Humana (Ticker: HUM) is poised for significant gains under potential changes in Medicare Advantage policies. Other notable players include Centene, CVS Health, and UnitedHealth.
Upcoming Themes and Takeaways
- AI Ecosystem Growth: Nvidia’s strategic investments underscore the importance of nurturing companies in AI and semiconductor-related industries.
- Data Center Boom: As AI adoption grows, data center infrastructure companies like Applied Digital stand to benefit significantly.
- Healthcare Policy Shifts: Changes in Medicare Advantage programs could create opportunities for healthcare providers.
Options Investing: Boosting Returns
With options trading growing to 40 million contracts daily, many investors face challenges. Nvidia’s moves highlight the importance of strategic investments, a lesson that can be applied to options strategies.
Conclusion
Nvidia’s aggressive investment strategy demonstrates how market leaders prepare for future challenges while capitalizing on current growth trends. By identifying companies that align with its AI vision, Nvidia is not only safeguarding its dominance but also fostering innovation in emerging technologies.
Stay tuned for more updates as we track these investments and explore new opportunities in the stock market!