Nvidia's AI Stock Portfolio Reveals Potential and Risks

Nvidia is one of the leading artificial intelligence (AI) companies in the world, but it's also an avid investor in AI stocks. According to recent data, Nvidia's public equity portfolio includes several companies that are capitalizing on the AI boom, and three of them - Space Exploration Technologies, CoreWeave, and Intel - make up almost 88% of the portfolio.

SpaceX, which is best known for revolutionizing the space travel industry, has a significant presence in Nvidia's portfolio with 33.1%. The company's CEO, Elon Musk, recently stated that within five years, AI will account for the overwhelming majority of the company's value. SpaceX is projecting $1 trillion in revenue by 2030, a substantial portion of which will presumably come from AI.

CoreWeave, on the other hand, has a 7.4% stake in Nvidia's portfolio. The company recently posted excellent second-quarter results, with revenue rising 112.5% compared to the year-ago period. CoreWeave remains unprofitable but is investing heavily into building data centers tailored to AI.

Intel has the largest share of Nvidia's portfolio with 47.3%. Intel is seeing soaring demand for its products thanks to the rise of agentic AI, or self-directed systems that can help companies automate tasks and boost productivity by autonomously working toward goals. However, investors are advised to wait for a pullback due to Intel's valuation being somewhat high at 80.7x forward earnings.

The market has already factored in some of SpaceX's AI-related success in its share price, making it less attractive at current levels. CoreWeave's stock doesn't seem overvalued given the company's revenue growth and backlog. Intel may grow its earnings fast enough to justify its valuation but is not a strong buy at current levels.