Nvidia Recently Acquired Stocks in Two Artificial Intelligence (AI) Companies. Is it Worth Following Suit?

Nvidia Recently Acquired Stocks in Two Artificial Intelligence (AI) Companies. Is it Worth Following Suit?

Diving into the world of tech investments, you might be curious about boosting the stock prices of small technology companies. One surefire way to achieve this is by announcing substantial investments in those firms by a tech giant like Nvidia (NASDAQ: NVDA). Let me fill you in on the recent happenings with two AI companies—Nebulus Group and WeRide—that Nvidia has shown interest in.

1. Nebulus Group

Late last year, Nebulus Group (NASDAQ: NBIS) became one of Nvidia's portfolio companies, as the tech giant purchased over 1.19 million shares. The investment didn't come as a shock—in December 2024, Nebulus Group went public, raising $700 million through private placement financing, with Nvidia among its investors.

Nebulus Group specializes in AI infrastructure and operates an AI-centric cloud platform in Finland. Using Nvidia's advanced GPUs, the company powers its servers, forming a robust partnership. Beyond AI infrastructure, Nebulus Group also owns Toloka, which provides data preparation services for AI model training with human expertise.

Toloka

The rapid expansion of new AI technologies, particularly when it comes to generative AI, has generated a massive market potential for Toloka's services. Data preparation is a crucial element in AI model training, and Toloka's human-centric approach sets it apart from competitors.

Nebulus Group also owns TripleTen, an online education platform offering courses in business intelligence analytics, cybersecurity, data science, quality assurance, and software engineering. This diversification of business units provides a strong foundation for revenue growth.

Last but not least, Nebulus Group operates Avride, a Texas-based company specialized in developing self-driving car technology and delivery robots. Autonomous vehicles using Avride's technology have traveled over 22 million miles without any significant accidents, highlighting the company's safety and efficiency.

2. WeRide

In another move, Nvidia invested in Chinese self-driving car company WeRide along with $458 million in its IPO on Nasdaq in October 2024. The initial public offering was backed by renound investors like Renault, Nissan, and Qiming Venture Partners.

WeRide is making significant strides in the autonomous vehicles market. From providing robotaxi services in the United Arab Emirates to robot bus services in France, to autonomous road-sweeping vehicles in Shantou, China, WeRide is aggressively expanding its global market presence.

Nvidia in WeRide is a strategic move to capitalize on the growing trend of L4+ autonomous vehicles. By investing in a company with a global footprint and partnerships with heavyweight players like Uber, Nvidia is positioning itself for long-term partnerships in the autonomous vehicle sector.

Should you invest in these AI stocks? Purchasing Nebulus Group and WeRide shares merely because Nvidia did might not be the wisest decision. Remember that Nvidia has invested at a lower cost than what you'll pay now. Besides, Nebulus Group and WeRide haven't turned a profit yet and face stiff competition from giants like Google Cloud, Amazon, Microsoft, Oracle, and leading autonomous vehicle players like Waymo and Zoox.

However, if you have sufficient patience, patience might be the key to unlocking some potential in Nebulus Group. The company's data center's energy efficiency gives it a competitive edge and a lower total cost of ownership. Additionally, the AI data center market's growth offers ample opportunities for multiple winners. Nebulus Group's other business units also offer exciting growth prospects.

There you have it! While Nvidia's recent investments in Nebulus Group and WeRide represent strategic moves in the AI and autonomous driving sectors, they also teem with investment possibilities. With opportunities aplenty, carefully consider your entry point into these high-potential companies.

1. The investment by Nvidia in Nebulus Group was not a surprise, given that Nebulus Group had gone public in December 2024, raising $700 million through private placement financing with Nvidia among its investors.
2. Nvidia's investment in WeRide in October 2024, along with its IPO, was a strategic move to capitalize on the growing trend of L4+ autonomous vehicles, positioning itself for long-term partnerships in the autonomous vehicle sector.
3. Nebulus Group's diversification of business units, including Toloka for data preparation services and TripleTen for online education, provides a strong foundation for revenue growth.
4. WeRide is making significant strides in the autonomous vehicles market, expanding its global market presence with robotaxi services in the United Arab Emirates and robot bus services in France.

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