Nvidia’s Strategic Moves in the Tech Investment Sphere
Nvidia, renowned for its dominance in the artificial intelligence (AI) chip market, recently made significant shifts in its investment portfolio that could have lasting implications. In the fourth quarter of 2025, the tech giant sold its stakes in Applied Digital (APLD) and Arm Holdings (ARM), while simultaneously entering a new investment in a burgeoning chip player whose stock has skyrocketed over 7,200% since its initial public offering (IPO).
Divesting from Applied Digital and Arm Holdings
Nvidia has a history with Arm, a company that licenses the architecture and designs integral to creating central processing units (CPUs) and graphics processing units (GPUs). Previously, Nvidia attempted to acquire Arm for $40 billion, but regulatory hurdles thwarted that initiative. Arm went public in 2023 and has since seen its market cap soar to $134 billion, more than doubling since its IPO. Nvidia’s divestment may indicate a strategic move to take profits while maintaining a 20-year licensing agreement for Arm technology, which will be used in CPUs for various applications, including robotics and supercomputing.
Insights on Applied Digital
Applied Digital, operating in the AI data center space, leases Nvidia GPUs to companies for running AI applications. The company’s performance has shown impressive growth, with a 177% year-on-year revenue increase in its 2026 second fiscal quarter. However, its current market cap of $8.6 billion raises concerns about valuation, particularly given its trading constraints relative to its substantial losses.
Investment in Intel: A Legacy Tech Player
In September 2025, Nvidia announced a $5 billion investment in Intel (INTC), a once-dominant tech player now striving to adapt to the evolving AI landscape. This collaboration aims to develop advanced chips for data centers and computers. Notably, Intel has also garnered support from the U.S. government, receiving a nearly $9 billion stake through initiatives such as the CHIPS Act. The company is investing over $100 billion to bolster its manufacturing capabilities across several states, including Arizona and Ohio.
Intel’s AI Aspirations
Intel is channeling its resources into becoming a major player in AI by developing a comprehensive open-source AI solution. This strategy includes training large language models (LLMs) and optimizing AI architecture to accelerate market readiness for businesses. The company is also working on its next-generation Jaguar Shores GPU, which is expected to compete with leading products from Nvidia and Advanced Micro Devices.
Market Reactions and Future Outlook
Intel’s stock has surged by over 73% in the past year, indicating positive market sentiment surrounding its recovery and strategic pivots. Nevertheless, the stock remains 29% down since five years ago, underscoring the challenges the company faces in the competitive CPU and GPU markets. As investors evaluate Intel’s trajectory, observing the effectiveness of its transition strategy will be crucial, especially in light of the intensive competition.
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