Key Takeaways:
- Nvidia owns equity stakes in CoreWeave and Arm Holdings, with 86% of its portfolio in CoreWeave and 5% in Arm Holdings.
- CoreWeave provides cloud computing services for artificial intelligence (AI) and other compute-intensive workloads, with a strong track record of delivering top results in MLPerf benchmarks.
- Arm Holdings designs central processing units (CPUs) and related technologies, with a strong market share in mobile devices and growing presence in data centers.
- Both CoreWeave and Arm Holdings have strong financial prospects, with CoreWeave expected to increase revenue at 82% annually through 2027 and Arm Holdings expected to increase adjusted earnings at 23% annually through 2027.
- The current valuations of both stocks may be reasonable, with CoreWeave trading at 7.7 times sales and Arm Holdings trading at 68 times earnings.
Introduction to Nvidia’s Equity Stakes
Nvidia’s success in the artificial intelligence (AI) infrastructure market is no accident. The company’s CEO, Jensen Huang, had the foresight to reinvest profits from its graphics and gaming business into AI product development over a decade ago. Today, Nvidia is a leader in the AI infrastructure market, and its equity stakes in other companies can provide clues about the future of AI. As of September 2025, Nvidia had 91% of its equity portfolio in two AI stocks: 86% in CoreWeave and 5% in Arm Holdings.
CoreWeave: A Leader in AI Cloud Computing
CoreWeave provides cloud computing services for artificial intelligence (AI) and other compute-intensive workloads. The company’s data centers are purpose-built to handle the massive amounts of power and memory required for AI training and inference, and to handle the immense heat generated by GPUs. As Dylan Patel, chief analyst at SemiAnalysis, noted, "CoreWeave continues to set the benchmark for AI cloud performance by demonstrating strong technical execution and operational maturity in managing large-scale AI cloud solutions." CoreWeave has established itself as a highly adept data center operator, regularly delivering top results in MLPerf benchmarks, the industry-standard in measuring the performance of AI systems.
CoreWeave’s Financial Performance
CoreWeave reported strong financial results in the third quarter, with revenue increasing 134% to $1.4 billion and adjusted EBITDA increasing 121% to $838 million. The company’s revenue backlog jumped 271% to $55.6 billion, driven by large deals with OpenAI, Meta Platforms, and other hyperscalers. CoreWeave’s revenue backlog has grown faster than any cloud company in history. The company’s stock currently trades at 7.7 times sales, a reasonable valuation for a company whose revenue is projected to increase at 82% annually through 2027. Among 33 analysts, CoreWeave has a median target price of $125 per share, implying 58% upside from its current share price.
Arm Holdings: A Leader in CPU Design
Arm Holdings is a semiconductor company that designs central processing units (CPUs) and related technologies like compute subsystems and software development tools. The company licenses intellectual property (CPU architecture and processor blueprints) to other companies that want to build custom chips for personal computers, data centers, and automotive systems. Arm CPUs have long been the industry standard in mobile devices because they are about 50% more power efficient than x86 chips from AMD and Intel. The company holds 99% market share in smartphone chips and has become a major player in data centers for the same reason.
Arm Holdings’ Financial Performance
Arm has gained more than 10 percentage points of market share in data centers in the last three years, and demand remains robust. Data center royalty revenue doubled in the most recent quarter due to continued deployments by hyperscale companies. Arm’s adjusted earnings grew 30% in the last quarter, and Wall Street expects adjusted earnings to increase at 23% annually through the fiscal year ending in March 2027. The current valuation of 68 times earnings may look expensive, but Arm has beaten the consensus earnings estimate by an average of 11% during the last six quarters. Among 40 analysts, the stock has a median target price of $180 per share, implying 57% upside from its current share price.
Conclusion
In conclusion, Nvidia’s equity stakes in CoreWeave and Arm Holdings provide insights into the future of AI. Both companies have strong financial prospects, with CoreWeave expected to increase revenue at 82% annually through 2027 and Arm Holdings expected to increase adjusted earnings at 23% annually through 2027. While the current valuations of both stocks may be reasonable, investors should carefully consider their investment decisions based on their individual financial goals and risk tolerance. As Jensen Huang’s foresight has shown, investing in the right companies at the right time can lead to significant returns in the long run.
https://www.fool.com/investing/2026/01/06/nvidia-has-91-of-portfolio-invested-in-2-ai-stocks/