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Nvidia (NVDA) holds a $2.7B investment portfolio focused on AI infrastructure. The portfolio has dropped 30% since Q3 ended.
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CoreWeave (CRWV) comprises over 91% of Nvidia’s portfolio but crashed 46% from Q2 levels to $88 per share.
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Applied Digital (APLD) surged 208% total and now exceeds $239M in value for Nvidia. Revenue jumped 84% to $64.2M.
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Nvidia (NASDAQ:NVDA) has quietly built a strategic investment portfolio not many investors are aware of targeting companies that enhance its AI ecosystem, from chip design to data infrastructure. This “secret” portfolio holds six positions that were valued at $4.3 billion at the end of the third quarter. These stakes back firms developing complementary technologies, such as GPU-optimized cloud services and AI-driven biotech.
However, Q3 brought challenges amid a broader AI market pause, with hyperscalers reassessing capex and investor sentiment cooling. The portfolio shed nearly $500 million in the quarter, an 11% drop, as four of six holdings declined, most sharply. Since Q3 ended in September, though, the slide deepened, with the overall value plunging 30% more to about $2.7 billion — a $1.1 billion loss. Only one holding defied the trend: Applied Digital (NASDAQ:APLD).
Nvidia’s portfolio woes stem largely from its largest bet, the AI cloud provider reliant on Nvidia’s GPUs for training large models, CoreWeave (NASDAQ:CRWV). At Q2’s close, Nvidia’s 24.3 million shares were worth $3.96 billion, over 91% of the portfolio. But CoreWeave’s stock has cratered amid debt concerns and AI hype fatigue. Since Q3’s end, it’s down 36%, and 46% from Q2 levels, now trading around $88 per share after peaking at $187 earlier in 2025. This single position accounts for most of the portfolio’s quarter-over-quarter decline.
Other holdings fared little better. Arm Holdings (NASDAQ:ARM), a chip architecture designer, slipped 12.5% since Q3 amid slower mobile demand. Recursion Pharmaceuticals (NASDAQ:RXRX), using AI for drug discovery, dropped 5.7% on clinical trial delays, and WeRide (NASDAQ:WRD), an autonomous driving firm, fell 17% as regulatory hurdles mounted.
The portfolio’s diversification into AI adjacencies hasn’t shielded it from sector-wide pressures like rising energy costs and delayed enterprise rollouts.
Amid the rubble, two positions posted gains, with Nebius Group (NASDAQ:NBIS) delivering solid returns. Formerly tied to former Russian search giant Yandex, Nebius now builds AI infrastructure, including GPU clusters. Nvidia’s 1.2 million shares, valued at $65.9 million at the end of Q2, have surged 69% since then, boosted by a $17 billion Microsoft (NASDAQ:MSFT) deal for cloud capacity. Nebius’s Q3 revenue jumped 355% year-over-year to $146 million, underscoring its switch to AI hyperscaler needs. However, the stock has fallen 17% since the end of Q3.
Yet Applied Digital outpaces even Nebius as the portfolio’s undisputed star. Nvidia’s 7.7 million shares, worth $77.7 million at Q2 close, have rocketed 128% quarter-over-quarter and another 35% since Q3, for a staggering 208% total gain. Now valued at over $239 million, this stake has single-handedly offset some broader losses.
Applied Digital designs and operates data centers tailored for high-performance computing, powering AI and blockchain workloads. Its Polaris Forge campus in North Dakota delivers 100 megawatts of capacity, drawing clients like CoreWeave for GPU-intensive builds.
In a market where AI stocks like CoreWeave and even Arm are falling, sometimes as much as 40% or more, Applied Digital’s ability to keep going stands out. Its fiscal Q1 2026 results, reported in October, crushed Wall Street estimates. Revenue hit $64.2 million, up 84% year-over-year, with adjusted EBITDA at $5.85 million. Net losses narrowed to $36.1 million, far better than feared.
The main driver was relentless data center demand. AI training requires massive, power-efficient facilities, and Applied Digital benefits directly from hyperscaler buildouts, including contracts with CoreWeave for colocation. Its sustainable designs, using renewable energy, align with ESG mandates that pressure rivals. Crypto also added tailwinds.
Bitcoin (CRYPTO:BTC) demand spiked after the halving, especially as its price briefly soared above $126,000, contributing to increased demand for data center capacity. As pure AI plays pause amid valuation resets, Applied Digital’s hybrid model — 60% high-performance computing and AI, 40% crypto — provides a buffer.
Analysts project 28% EBITDA growth in fiscal 2026, with $16 billion in existing five-year leases, giving it good visibility into revenue for the years ahead. Trading at 30x forward sales, it’s carrying a lot of investor expectations with it. Although Applied Digital is still generating losses, they narrowed significantly in Q3 and it projects an annual net operating income run rate of $1 billion by 2030.
Applied Digital’s outperformance is the result of focused execution. However, its continued success depends on navigating the AI slowdown, potentially crimping data center leases if clients like Microsoft trim budgets. The crypto winter could bite as well, as Bitcoin’s near-30% pullback echoes 2022’s bear market, possibly idling mining rigs and pressuring margins.
Still, the upside potential outweighs risks. Nvidia’s endorsement validates its tech, so if AI capex continues strong next year — as Nvidia forecasts it will — Applied Digital could double again. However, having tripled in six months, it’s no secret anymore: in Nvidia’s tanking portfolio, this is the winner worth watching.
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