Nvidia Has 80% of Its Portfolio Invested in 2 Artificial Intelligence (AI) Stocks

Nvidia (NASDAQ:NVDA) is arguably the most critical company in the artificial intelligence (AI) ecosystem, given the central role its chips and software play in powering AI workloads.

That deep expertise means Nvidia is well-suited to identifying other potential winners in the AI infrastructure market, so investors should pay attention to where the company keeps its money. Nvidia's capital allocation strategy can reveal opportunities that extend beyond its core chip business.

As of the second quarter, Nvidia had 80% of its investment portfolio concentrated in two AI stocks: 33% in Space Exploration Technologies (NASDAQ:SPCX) and 47% in Intel (NASDAQ:INTC). Here's what investors should know.

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Space Exploration Technologies: 33% of Nvidia's portfolio

SpaceX is a vertically integrated business whose operations span space, connectivity, and artificial intelligence. The company has an important economic moat in reusable rockets, which have made it much less expensive to launch payloads into orbit. That edge helped SpaceX build Starlink, the world's largest satellite internet service.

CEO Elon Musk wants to combine those proficiencies to build orbital (space-based) data centers, which could theoretically solve the power and cooling challenges associated with terrestrial data centers. In its SEC Form S-1, SpaceX states: "We believe we are the only company with a commercially viable path to building orbital AI compute at scale."

SpaceX reported encouraging third-quarter financial results. Revenue increased 161% to $14.6 billion, up from 92% revenue growth in the second quarter. The driving force behind the acceleration was momentum in the AI business, with revenue increasing by more than 800%. Investors have reason to think the company can maintain that momentum.

Earlier this year, SpaceX said it would rent data center capacity to Anthropic, Alphabet's Google, and Reflection AI in deals collectively worth $28 billion per year. More recently, the company said it had a fourth customer that will pay $13 billion per year, bringing the total annual commitments to $41 billion. For context, SpaceX reported about $3 billion in AI revenue in 2025.

However, SpaceX is a risky investment because the stock trades at 68 times sales, a rich valuation even for a company whose revenue is projected to increase at 150% annually through 2028. I think investors who are confident in the company's growth prospects can buy a few shares today, but I would keep the position small.

Intel: 47% of Nvidia's portfolio

Intel is the leader in central processing units (CPUs), with about 59% of the personal computer market and 54% of the data center server market as of the second quarter. The company benefits from vertical integration by designing and manufacturing its own chips, and it wants to expand its foundry operations by making chips for other companies.

Despite its market leadership, Intel has lost substantial market share over the last decade in PCs and servers due to execution missteps and missed opportunities. In particular, its slow transition to 10-nanometer technology allowed Advanced Micro Devices to bring more powerful, more power-efficient processors to market faster by working with Taiwan Semiconductor.

Intel is showing signs of a comeback under CEO Lip-Bu Tan. Revenue rose 25% to $16.1 billion in the second quarter, the fastest growth in more than 15 years. That was driven by strong momentum in the data center and foundry business segments. Intel also reported non-GAAP earnings of $0.42 per diluted share, up from a loss of $0.10 per diluted share in the same quarter last year.

However, Intel's impressive financial results say more about the strong demand for CPUs than about the company itself. Despite reporting its best revenue growth in years, Intel still ceded CPU market share to AMD and Arm in PCs and servers in the second quarter. Also, Intel's growth prospects in the foundry space remain questionable, as TSMC dominates the market.

Intel currently trades at 87 times adjusted earnings. That seemingly rich figure looks a little more palatable in context. Wall Street expects adjusted earnings to grow at 56% annually through 2027. Investors can buy a small position in Intel today, provided they understand the stock's high valuation could lead to substantial volatility in the future.

Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Arm Holdings, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.