Nvidia Has 95% of Its Portfolio Invested in 2 Brilliant AI Stocks

Group 1: Nvidia's Investment Strategy - Nvidia holds significant positions in two AI stocks: CoreWeave and Arm, with 91% of its $4.3 billion portfolio allocated to CoreWeave and 4% to Arm [1][8] Group 2: CoreWeave Overview - CoreWeave specializes in cloud infrastructure and software services tailored for AI workloads, operating 33 data centers across the U.S. and Europe [3] - The company has a strong relationship with Nvidia, allowing it to launch new chips ahead of competitors, including being the first to offer Nvidia's H100, H200 GPUs, and GB200 superchips [4] Group 3: CoreWeave Financial Performance - CoreWeave's Q2 revenue surged 206% to $1.2 billion, with non-GAAP operating income rising 134% to $200 million, although the non-GAAP net loss widened to $131 million when including interest payments [5][6] - The company is heavily reliant on Microsoft, which contributed 71% of its revenue in the quarter, and anticipates capital expenditures exceeding $20 billion this year [6] Group 4: CoreWeave Valuation and Market Outlook - CoreWeave trades at 12 times sales, with revenue expected to grow at 88% annually through 2027, and stock price targets range from $32 to $180 per share [7] Group 5: Arm Holdings Overview - Arm designs CPU architectures and licenses its intellectual property to companies, capturing 99% market share in smartphones and increasing demand in data centers for AI workloads [8][9] Group 6: Arm Financial Performance - Arm's total sales increased 12% to $1 billion, but it missed sales estimates due to lower licensing and royalty revenue, with non-GAAP net income falling 13% to $0.35 per diluted share [10] - The company expects sales growth to accelerate to about 25% in the current quarter [10] Group 7: Arm's Licensing Strategy - Arm has begun licensing compute subsystems, which has more than doubled its customer base, leading to increased royalty revenue potential [11] Group 8: Arm Market Expectations - Wall Street anticipates Arm's adjusted earnings to grow at 23% annually through March 2027, although its current valuation of 87 times adjusted earnings appears high [12]