Nvidia’s Labyrinthine AI Portfolio

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In the annals of corporate strategy, few entries rival the enigmatic portfolio of Nvidia (NVDA). A treasury of $4.3 billion, as of the June-ending quarter, reveals a labyrinth where 95% of assets are entwined with two names: CoreWeave (CRWV), the keeper of 91%, and Arm Holdings (ARM), the curator of 4%. A curious distribution, like ink spilled across a map of the future.

What, then, do these luminous investments portend for the age of artificial intelligence? Let us descend.

CoreWeave: The Labyrinth of Computation

CoreWeave, that alchemist of cloud infrastructure, forges labyrinths of computation tailored for artificial intelligence. Its 33 data centers, scattered like constellations across the United States and Europe, are not mere warehouses but recursive architectures where code becomes cathedral. SemiAnalysis, that arbiter of digital temples, anointed CoreWeave as the preeminent AI cloud, its scores eclipsing those of Amazon, Microsoft, and Alphabet‘s Google.

The company’s kinship with Nvidia is a tale of symbiosis. CoreWeave wields Nvidia’s H100, H200, and GB200 GPUs as a poet wields quills, often before their public debut. This privilege has secured it patrons of note: Microsoft, OpenAI, and even Nvidia itself. Yet, within this gilded hall, shadows linger.

Second-quarter results gleamed with revenue surging 206% to $1.2 billion, non-GAAP operating income ascending 134% to $200 million. But the specter of debt looms. When interest payments are accounted for, the ledger reveals a net loss of $131 million. Microsoft, that colossus, accounted for 71% of revenue-a dependency as precarious as a bridge of mirrors. Capital expenditures, forecast to exceed $20 billion this year, threaten to drown the enterprise in a deluge of liabilities, with interest already consuming 22% of revenue.

CoreWeave’s valuation, at 12 times sales, is a riddle. Analysts, those modern scribes, split between $32 and $180 per share. A stock priced at $100 per share becomes a parable of risk and reward. For the patient investor, it is a fragment of a mosaic-small, sharp, and potentially luminous.

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Arm Holdings: The Library of Architectures

Arm Holdings is no mere semiconductor company but a custodian of blueprints. Its architectures, licensed to the architects of our digital age, reside in 99% of smartphones and now, increasingly, in the data centers where artificial intelligence devours power. Amazon, Microsoft, and Alphabet have all drawn from Arm’s well, as has Nvidia itself. Over 70,000 enterprises now run AI workloads on Arm chips-a figure that swells like an infinite library.

Yet, the June-ending quarter was a chapter marred by missteps. Revenue, though up 12% to $1 billion, missed estimates. Licensing and royalty income faltered, and operating margins contracted. Non-GAAP net income fell 13% to $0.35 per share. But the narrative is not yet complete. Arm has begun licensing compute subsystems-blueprints that marry CPUs with other components, accelerating the birth of new products. The number of CSS customers doubled in the last quarter, a harbinger of higher royalty streams.

Wall Street, that oracle of numbers, projects adjusted earnings growth of 23% annually through 2027. At 87 times adjusted earnings, the valuation seems a tower of Babel. Yet history whispers that Arm has consistently outpaced expectations-by 11% in the past six quarters. For the investor with the patience of a librarian, this is a tome worth perusing, though one might wait for a cheaper folio.

Thus, in the grand design of Nvidia’s portfolio, CoreWeave and Arm are not mere stocks but mirrors reflecting the infinite possibilities-and perils-of artificial intelligence. A labyrinth, perhaps, with no exit. Or perhaps, a beginning. 🌀

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2025-08-18 11:14