Nvidia has built a nearly $100 billion equity portfolio from virtually scratch in just two years by investing in other tech companies.
The AI chipmaker, led by CEO Jensen Huang, held $99 billion in equity investments as of July 26, according to its latest earnings report.
That included roughly $48 billion in publicly traded stocks and other marketable securities, $48 billion in shares of private companies and other non-marketable securities, and $3 billion in equity-method investments.
Its equity portfolio surged 14-fold in a year from about $7 billion last summer, and 45-fold from $2.2 billion two summers ago. The company also reported a further $25 billion in equity investment commitments as of July 26.
Nvidia’s quarterly portfolio disclosure offered a glimpse at its public US stock portfolio as of June 30. It held a $30 billion stake in Intel, a $21 billion position in SpaceX, and investments in CoreWeave, Coherent, Synopsys, and Nokia, each worth between $2 billion and $5 billion.
The huge increase in Nvidia’s equity holdings has vaulted it into the ranks of the biggest tech investors. It still trails the likes of Alphabet, which had a $232 billion equity portfolio at the end of June, including $94 billion of SpaceX shares following its IPO in June.
Nvidia stock has rocketed from below $15 at the start of 2023 to $228 at Thursday’s close. That 15-fold increase in under three years has catapulted its market capitalization to $5.5 trillion, making it the world’s most valuable company.
The chipmaker has become the premier enabler of the AI boom by providing the types of semiconductors needed to power the nascent technology, financing the AI infrastructure buildout, and investing in its AI peers.
A Nvidia spokesperson pointed Business Insider to finance chief Colette Kress, saying on the company’s latest earnings call that frontier AI labs’ ability to improve their products, attract more users, and generate more revenue was being “limited by compute,” so Nvidia was “needed to help power this flywheel” and had thus invested almost $50 billion in them.
Want more Business Insider in your news feed?
Add BI in Google so our reporting is easier to find when you’re searching for what matters.
In its latest earnings report, Nvidia said that it makes equity investments to “enhance our growth opportunities, cultivate our ecosystem, and strengthen our competitive position.”
However, Michael Burry of “The Big Short” fame has said Nvidia is “overreaching” in its efforts to juice its growth by financing and investing in customers of its chips.
Similarly, former “Shark Tank” investor Mark Cuban has said it’s “truly scary” how reliant the AI boom is on Nvidia “funding everyone and anyone.”
Read the full article here
