Nvidia Quietly Boosted Its Stake in This AI Stock That's Climbed 120% in 5 Months. Should You Follow?

Core Insights - Nvidia has demonstrated significant growth in earnings, driven by its focus on AI products and services, with revenue reaching record levels in the billions [1] - The company has invested over $4 billion in shares of six technology companies, indicating a strategic approach to its investment portfolio [2] Nvidia's Investment in CoreWeave - Nvidia increased its stake in CoreWeave by approximately 0.4%, bringing its total shares to 24,277,573, valued at over $3.9 billion, making CoreWeave 91% of Nvidia's portfolio [5][6] - CoreWeave operates over 250,000 Nvidia GPUs, providing customers with access to high-powered computing for AI platforms [7] CoreWeave's Financial Performance - CoreWeave's revenue tripled to $1.2 billion in the second quarter, prompting an increase in its full-year revenue forecast by $250 million to between $5.15 billion and $5.35 billion [8] - The company plans to invest at least $2.9 billion in capital spending in the third quarter, indicating a focus on growth despite not being profitable yet [8] Strategic Acquisition - CoreWeave is planning to acquire Core Scientific in an all-stock transaction, which is expected to reduce lease liabilities by over $10 billion, potentially lowering costs and supporting future earnings growth [9] Investment Considerations - While CoreWeave presents high growth potential, it faces competition from major cloud service providers and is not yet profitable, which may deter cautious investors [10] - For aggressive investors, the recent dip in CoreWeave's stock price offers a reasonable entry point, supported by Nvidia's confidence in the company's future [11]