AI Stock Rally... Shares Soar 66% on Nvidia Investment News

"Investors captivated by Nvidia's artificial intelligence (AI) story want everything Nvidia touches." AI rally leader and the third-largest company by market capitalization, Nvidia, saw AI-related stocks it invested in surge simultaneously on the 15th (local time).

[Image source=Reuters Yonhap News]

On that day in the New York stock market, semiconductor design company Arm's stock price closed up 5.76% compared to the previous session. Voice recognition AI company SoundHound surged 66.74%, and Nano-X jumped 49.37%. Recursion Pharmaceuticals rose 13.83%. This followed Nvidia's disclosure of its initial investments in Arm, SoundHound AI, Recursion Pharmaceuticals, Nano-X Imaging, and Two Simple in a filing submitted to the U.S. Securities and Exchange Commission (SEC) the previous day.

Economic media outlet CNBC reported, "Most of these companies' Nvidia investment facts were already known, but their stock prices soared," adding, "Due to the AI boom, Nvidia's investments are being regarded as much more significant."

In particular, SoundHound's stock price at one point during the session soared about 80%. Nvidia confirmed it holds approximately $3.7 million in SoundHound shares. The company had also introduced Nvidia as a strategic investor during its 2022 initial public offering (IPO). Nvidia stated that its stake in Nano-X, which applies AI to medical imaging technology, is valued at about $380,000.

Nvidia, which supplies over 90% of the global market for high-value-added semiconductors such as graphics processing units (GPUs) used in AI development, is considered the biggest beneficiary of the AI craze. This year alone, its stock price has risen nearly 50%, surpassing Amazon and Google Alphabet to become the third-largest by market capitalization.

Nvidia is scheduled to release its quarterly earnings on the 21st. Wall Street expects Nvidia's revenue growth to reach 118%. If Nvidia again reports earnings and guidance that exceed expectations, its stock price rally is expected to accelerate further. Ahead of the earnings announcement, leading Wall Street investment banks such as Morgan Stanley, Goldman Sachs, and UBS have raised Nvidia's target price to the $750?850 range.