Nvidia Dumped Its Stakes in Arm Holdings and Applied Digital, and Has Seen Its Newest Investment Double in 2 Months
Key Points
Form 13Fs provide a quarterly snapshot of the stocks Wall Street's savviest fund managers -- and public companies -- have been buying and selling.
AI superstar Nvidia sent shares of Arm Holdings and Applied Digital to the chopping block during the fourth quarter, and profit-taking may represent only part of the story.
Meanwhile, Nvidia has quickly doubled its $5 billion investment into one of Wall Street's legacy chipmakers.
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Arguably, one of the most telling data releases on Wall Street is the quarterly filing of Form 13Fs with the Securities and Exchange Commission (SEC). A 13F provides investors with a snapshot of the stocks Wall Street's prominent money managers bought and sold in the latest quarter.
However, 13Fs also apply to publicly traded companies with at least $100 million in assets under management, such as artificial intelligence (AI) behemoth Nvidia (NASDAQ: NVDA). Although investors buy and hold Nvidia stock to gain exposure to its superior graphics processing units (GPUs), the company also oversees a $13.1 billion investment portfolio.
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During the fourth quarter, Nvidia's 13F shows it completely dumped its stakes in Arm Holdings (NASDAQ: ARM) and Applied Digital (NASDAQ: APLD), but absolutely piled into one of Wall Street's hottest tech stocks in recent months.
Nvidia sent shares of Arm Holdings and Applied Digital to the chopping block
According to Nvidia's latest 13F, the company sold all 1,101,249 shares of semiconductor intellectual property titan Arm Holdings and 7,716,050 shares of AI-data center operator Applied Digital.
Profit-taking certainly makes sense as a logical sell-side catalyst. Arm Holdings, a company Nvidia once tried to acquire, has surged since its initial public offering (IPO) in September 2023. Nvidia invested in Arm's IPO at a $51 offering price, with shares of the company spending almost the entirety of the last two years hovering between $100 and $175 per share.
Meanwhile, Applied Digital had been a continuous holding since the third quarter of 2024. Over a 15-to-18-month stretch (since we don't know precisely when Nvidia sold during the fourth quarter), Applied Digital stock rose by 500% to 1,000%.
But these are also richly valued stocks. Applied Digital sports an $8.1 billion market cap with $347 million in estimated sales this year, equating to a price-to-sales (P/S) ratio of more than 23.
Although Arm is a more established company and its licensing/royalty model generates extremely high margins, its P/S ratio of 29 (based on estimated 2026 sales) is nevertheless frothy.
Image source: Getty Images.
Nvidia takes a big bite of Intel
On the other hand, Nvidia was an avid buyer of Intel (NASDAQ: INTC) stock -- though this shouldn't come as a surprise. Nvidia announced a $5 billion investment in the struggling chipmaker in September, which was eventually given the green light by regulators to proceed in December. The agreed-upon price of $23.28 per share resulted in Nvidia buying 214,776,632 shares of Intel.
Between the date Nvidia officially purchased shares at the predetermined/agreed-upon price of $23.28 in late December and the time of this writing (Feb. 25), shares of Intel have doubled. Nothing like a quick $5 billion unrealized gain for Jensen Huang's company.
Nvidia will collaborate with Intel to create AI data centers that incorporate Nvidia's GPUs and networking solutions alongside Intel's x86-based central processing units. Intel also plans to sell notebooks and personal computers that incorporate Nvidia's GPUs.
If Intel can effectively execute a multiyear turnaround, it'll mark another successful venture for Nvidia's boss and potentially generate billions in investment income.
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Sean Williams has positions in Intel. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool has a disclosure policy.
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