Highlights
① Nvidia's investment layout shows a diversified trend, covering multiple fields such as AI infrastructure, voice interaction, and medical health, reflecting the deep penetration of AI technology in various industries.
② Most of Nvidia's concept stocks are in a period of rapid growth. Although their current profitability is limited, they have unique technical advantages and commercialization potential in their respective segments. Nvidia's investment not only brings financial support, but more importantly, technical cooperation and ecological empowerment, which will help accelerate the product landing and market expansion of these companies.
③ Nvidia's investment often represents the direction of industry development, reflects the key areas of AI technology application, and implies potential technological breakthroughs. Investors need to pay close attention to the commercialization progress, technological innovation capabilities and industry competition landscape of these companies, and discover emerging investment opportunities in advance by understanding Nvidia's strategic layout.
In an article a few months ago, the RockFlow investment research team summarized the real moat of Nvidia, the leading AI company, and why we believe that Nvidia is not only a great company, but also an investment target with a high potential return rate.
But in fact, in addition to Nvidia itself, the key tracks and companies it invests in and focuses on have also been repeatedly sought after by the U.S. stock market. The market believes that Nvidia's investment decisions are based on a deep understanding and forward-looking judgment of the development of AI technology, often representing the direction of industry development, and companies that receive its investment may enjoy multiple preferential treatments such as technical support, chip supply and ecological resources. Therefore, Nvidia concept stocks are expected to share the huge dividends of AI transformation, which is particularly worthy of attention.
In this article, the RockFlow investment research team will analyze Nvidia's holdings for you to help you understand its long-term investment value and feasible investment strategies (Note: This article does not include ARM as a research target. It is also one of Nvidia's holdings, but its market value has already exceeded 100 billion US dollars, which is not within the hundreds of millions to billions range studied in this article).
1. Serve Robotics (SERV), focusing on the research and development of automatic delivery robots
What do AI leader Nvidia and the world's largest ride-hailing platform Uber have in common? The answer is that they are both optimistic about an automatic delivery robot company.
Uber is working with 14 different companies to develop an autonomous driving platform because it expects the mobile industry to get rid of human drivers. Technologies such as autonomous driving and robotics are driven by AI, and Nvidia has also developed its own autonomous driving platform. Together, the two chose to invest in SERV, a $600 million company that develops autonomous delivery robots. Together, they own more than 20% of SERV's outstanding shares, a sign that they are bullish on the company's prospects.
Existing last-mile delivery solutions are quite inefficient in most cities across North America. Companies like Uber Eats and DoorDash rely on couriers who typically use cars to deliver food and other products to customers. SERV once asked a thoughtful question: Why use a two-ton car to deliver a two-pound burrito?
Robots and drones may be a better solution. SERV says the hardware and software costs associated with developing AI and automation are falling rapidly, so robots are becoming an increasingly economical option. It predicts that once robot adoption increases and the business scales, its cost per delivery will eventually be as low as $1.
SERV’s robots have Level 4 autonomous driving capabilities, meaning they can drive on sidewalks within designated areas without human intervention. Since the beginning of 2022, the company’s robots have delivered more than 50,000 orders to more than 400 restaurants in Los Angeles, and the reliability of these deliveries is as high as 99.94%. SERV says this makes the robots 10 times more reliable than human drivers.
The company’s latest Gen3 robot is the smartest and fastest robot to date, reaching a top speed of 11 miles per hour. Thanks to Nvidia’s Jetson Orin technology, which includes the hardware and software needed for advanced robotics and computer vision, the Gen3 is five times more powerful than SERV’s previous generation of robots. It has a faster top speed, a longer range, and a longer operating time, all of which combined means a 50% reduction in operating costs.
According to the contract with Uber, SERV is working to deploy 2,000 new robots by the end of 2025, which will enable it to expand to other parts of California, as well as Dallas and Fort Worth, Texas. This is also a win for Uber, which will save money by reducing the use of manual delivery drivers if the plan is successful.
SERV was previously spun off from Postmates, which was acquired by Uber, and became an independent entity in 2021. However, Uber remains SERV's largest investor, holding a 12% stake. Nvidia has invested in SERV since 2022 and currently holds a 10% stake.
The RockFlow investment research team believes that its long-term investment value is mainly reflected in its leading technology, huge market potential, long-term cost advantages over manual delivery, and clear business model. In the future, as the demand for automation continues to grow, SERV will have more application scenarios to expand.
2.Nebius Group (NBIS), an emerging AI cloud computing service provider
Nebius is a cloud computing and AI infrastructure service provider. On December 2, 2024, the company announced the completion of a $700 million round of financing, with participation from venture capital firms Accel, NVIDIA, and Orbis Investments. The proceeds will be used to further build large-scale GPU clusters, expand cloud platforms, and provide developers with more tools and services to fully support the innovative development of global AI pioneers.
NBIS's AI services rely heavily on NVIDIA's high-end GPUs. This financing will power NBIS to accelerate the construction of more advanced AI infrastructure and deepen its strategic partnership with NVIDIA. With NVIDIA's advanced technical support, NBIS is able to provide customers with a more efficient and powerful computing platform, thereby enhancing its competitiveness in multiple key areas such as cloud computing, big data analysis and AI development.
NVIDIA's technological advantages have significant strategic value to NBIS. By acquiring NVIDIA's latest GPU and AI acceleration hardware, NBIS can not only enhance the computing power of its infrastructure, but also quickly adapt to the growth of global AI application demand and provide customers with efficient and scalable solutions.
In fact, NBIS became an NVIDIA certified partner as early as Q3 2023. It has already deployed a large number of NVIDIA H100 GPUs for AI training, and the two parties have in-depth cooperation and jointly developed enterprise-level AI solutions.
The RockFlow investment research team believes that the long-term investment value of NBIS includes: the growth potential of the continued expansion of the AI and cloud computing markets, competitive technical strength in the field of AI infrastructure, a high-quality enterprise customer base, NVIDIA's advanced technical support, and continuous income from the subscription model. Therefore, its future performance is worth looking forward to.
3. SoundHound AI (SOUN), AI-enabled voice brings strong growth
As the super bull stock in the AI sector this year, SoundHound AI's stock price has soared more than 600% this year, beating Nvidia.
SOUN disclosed record third-quarter revenue last month and raised its full-year revenue forecast, citing the company's successful expansion of target markets. CEO Keyvan Mohajer said in the third-quarter earnings statement: "We believe that voice is an extremely attractive application of applied generative AI."
In the earnings call, SOUN updated the progress of its Polaris large language model. Mohajer said Polaris takes the company's proprietary automatic speech recognition technology to a new level. Polaris learns based on billions of real conversations accumulated over the years and more than 1 million hours of audio files in dozens of languages. They have put Polaris into practical applications and the results are excellent. Accuracy has been significantly improved while hosting costs have been reduced. It is said that Polaris currently handles about one-third of the AI interactions that SOUN handles for customers in the catering industry.
In addition, NVIDIA is not only a shareholder of SOUN, but also its partner. Earlier this year, SOUN announced an in-car voice assistant that uses a large language model and runs on NVIDIA's DRIVE technology.
SOUN's outstanding performance has attracted the pursuit of many funds. Investors believe that its AI voice products have strong demand in various industries such as automobiles, catering, financial services, healthcare and insurance, and SOUN has the ability to continue to improve the industry diversification of solutions.
RockFlow's investment research team believes that given SOUN's rapid progress in AI business, it has not only launched a new generation of voice recognition engines and developed a multi-language real-time translation system, but its AI assistant has been used to handle complex conversations. In the future, it will continue to expand vertical industry applications, thereby bringing more revenue conversion.
4. Applied Digital (APLD), AI cloud service company will benefit from the growth in computing power demand
APLD designs, develops and operates digital infrastructure solutions and cloud services, high-performance computing and AI industries in North America. In September this year, the AI cloud company received $160 million in financing from investors including Nvidia and related companies. According to statistics, Nvidia currently holds a total of approximately 7.72 million shares in APLD, a developer of digital infrastructure solutions, worth approximately US$63.66 million, equivalent to 3% of APLD's shares.
In the AI boom, Nvidia has been increasing its investment to support companies that use its chips. As for APLD, it has a close relationship with Nvidia: as early as July 2023, it announced a partnership to build an AI supercomputing center, not only purchasing a large number of Nvidia H100 GPUs, but also obtaining Nvidia's technical support certification.
In the past few quarters, APLD's AI business development has been very successful. It has not only built multiple AI computing clusters and provided AI model training infrastructure, but also developed sustainable energy AI computing solutions and continued to expand AI cloud services. In July 2023, it signed a huge contract with Character.AI, which is a well-known case. In December 2023, APLD officially announced that it had obtained a long-term contract (without disclosing the customer), which further demonstrated the market's confidence in its business.
RockFlow's investment research team believes that APLD's stock price will bring more surprises due to the growing demand for AI computing power.
5. Nano-X Imaging (NNOX), AI medical care and auxiliary diagnosis are expected to play a greater role
AI medical company Nano-X Imaging has developed a commercial-grade tomography device with a digital X-ray source, providing remote radiology services and developing AI applications for real-world medical imaging applications.
More importantly, the company's Nanox. CLOUD can match medical images with radiologists using a matching engine, providing an image repository, connection to diagnostic-assisted artificial intelligence systems, billing, and reporting. Its MARKETPLACE platform can provide AI-based software imaging solutions for hospitals, health maintenance organizations, integrated medical networks, pharmaceutical companies, and insurance companies, aiming to identify or predict undiagnosed or underestimated medical conditions such as osteoporosis and cardiovascular disease by mining data from existing computed tomography images.
The company received funding from Foxconn and SK Telecom several times in 2020. Its relationship with NVIDIA can be traced back to last year. In Q4 of 2023, NNOX began using the NVIDIA Clara platform, and its AI medical imaging analysis has also long used NVIDIA GPUs. In addition, NNOX has long been supported by NVIDIA's medical AI acceleration program.
RockFlow's investment research team believes that NNOX's current AI progress is mainly reflected in: developing an AI-assisted diagnosis system, launching a cloud-based medical image analysis platform, using AI to screen for multiple diseases, and continuously expanding the medical image database that can be used for AI analysis. In the future, as AI capabilities expand, it will continue to play a huge role.
6. Recursion (RXRX), AI-driven drug development will bring a new revolution
From drug development to US FDA approval, it may take more than 15 years for a drug to be launched, and the cost is as high as $2.5 billion. The initial arduous task of drug development may take several months to more than a year to complete. After spending millions of dollars, up to 90% of drug candidates often fail clinical trials.
RXRX uses AI, automated biology and high-throughput screening, and machine learning algorithms to identify and predict the efficacy of potential drug targets, thereby accelerating the drug discovery process. It has a huge proprietary chemical and biological database called Recursions Data Universe, which is more than 23 PB in size and includes data on disease-related proteins, genes, and pathways. Its Recursion Map contains hundreds of billions of searchable chemical and biological inferences, and can conduct millions of wet lab experiments every week.
RXRX can assess the potential failure of drugs earlier, saving millions of dollars and bringing drugs to market faster and more efficiently. RXRX has established partnerships with Bayer and Roche Holding AG.
In July 2023, Nvidia invested $50 million in RXRX to help accelerate the development of its AI drug discovery model. In February 2024, Nvidia officially announced that it holds approximately $76 million of RXRX stock. RXRX has long used the DGX SuperPOD system developed by Nvidia, and the two are also jointly developing a digital biological platform.
The RockFlow investment research team believes that AI innovation still has great potential in medical applications and drug development, including the construction of biological data mapping technology, AI-driven drug discovery platforms, machine learning to predict drug effects, and laboratory automation. RXRX is involved in all of these, and its future is still full of considerable value-added potential.
Conclusion
RockFlow's investment research team believes that tracking Nvidia's holdings in concept stocks has important reference value. Investors can continue to pay attention to Nvidia's increase in holdings of related concept stocks, AI commercialization progress, revenue growth and gross profit margin changes, new product/service releases, changes in the industry's competitive landscape, etc. Judging from past stock price fluctuations, Nvidia's new investment, technology breakthrough announcements, and performance inflection point confirmations are all good entry opportunities.
However, it should be reminded that rational analysis is required when investing, focusing on the company's fundamentals and long-term development capabilities, and avoiding simple hype. In addition, diversification, setting stop losses, and regular rebalancing are also important strategies for risk control.
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