Nvidia’s $71 Million Bet: Small-Cap AI Stocks Driving GPU Demand
Nvidia pumps $71 million into SoundHound AI and Applied Digital to fast-track advanced AI and GPU use. Review how these other small-cap stocks drive Nvidia’s strategic growth.
Nvidia, the semiconductor giant is still riding the AI wave, managing to use the rising GPU demand to make smart acquisitions of smaller AI-based firms.s. As per Nvidia’s Q3 13F filing, two small-cap stocks invested are SoundHound AI and Applied Digital, which are instrumental in Nvidia’s expansion.
SoundHound AI: A Voice AI Innovator
Nvidia has an investment of $8 million in SoundHound AI, and this has stake of 1.7 million shares. The voice-assistance company is using Nvidia’s DRIVE platform to its advantage by adding cutting-edge voice AI solutions to electric cars and other uses.
In Q3, SoundHound’s revenue grew 89% year-over-year. This was due to the company’s purchase of Amelia, an enterprise AI firm, and growth in key markets like restaurants and cars. The company still has an adjusted net loss of $15 million, but it wants to start making money by 2025. Nvidia’s investment shows how well the two companies can work together to make AI-driven innovations happen in many fields.
Applied Digital: Powering AI-Driven Data Centers
A $63 million stake in Nvidia’s stock is held by Applied Digital, a company that designs and runs data centers that are ready for AI. Last quarter, the company’s sales went up 67% year-over-year, which shows that more AI tasks are being needed.
The partnership helps Nvidia sell more GPUs and lets Applied Digital grow its high-performance data center business. Notably, the company is almost done signing a deal for a huge 369,000-square-foot AI-focused building in the U.S. It keeps getting new business clients for its cloud services business, which now brings in half of its income.
Why This Matters
Nvidia’s investments in these small-cap AI companies show how it plans to encourage more people to use AI and improve its position as the leader in the field. As SoundHound and Applied Digital grow, so does the demand for Nvidia’s GPUs. This creates a growth circle that benefits both companies.
As AI changes businesses, Nvidia’s actions may lead to long-term gains for its stockholders. Analysts are keeping a close eye on these investments, which further solidifies Nvidia’s position as a leader in AI change.
