Nvidia (NVDA +1.40%) chips and systems did not become the industry standard in artificial intelligence (AI) infrastructure by chance. Instead, CEO Jensen Huang had the foresight to reinvest profits from its graphics and gaming business into AI product development over a decade before ChatGPT caught the world's attention.
Accordingly, it makes sense to monitor where Nvidia is investing its money today, as doing so could provide clues concerning the future of AI. As of September 2025, the company had 91% of its equity portfolio in two AI stocks: 86% in CoreWeave (CRWV +0.91%) and 5% in Arm Holdings (ARM 0.44%).
Here's what investors should know about those stocks.
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CoreWeave: 86% of Nvidia's portfolio
CoreWeave provides cloud computing services for artificial intelligence (AI) and other compute-intensive workloads. Whereas data centers have traditionally been designed for general-purpose computing, CoreWeave data centers are purpose-built to handle the massive amounts of power and memory required for AI training and inference, and to handle the immense heat generated by GPUs.
CoreWeave has established itself as a highly adept data center operator. The company regularly delivers top (often record-breaking) results at MLPerf benchmarks, the industry-standard in measuring the performance of AI systems. In turn, research firm SemiAnalysis recently ranked CoreWeave as the best AI cloud, scoring it above Amazon, Microsoft, and Alphabet.
"CoreWeave continues to set the benchmark for AI cloud performance by demonstrating strong technical execution and operational maturity in managing large-scale AI cloud solutions," wrote Dylan Patel, chief analyst at SemiAnalysis.
CoreWeave reported strong financial results in the third quarter. Revenue increased 134% to $1.4 billion and adjusted EBITDA increased 121% to $838 million. Meanwhile, revenue backlog jumped 271% to $55.6 billion, driven by large deals with OpenAI, Meta Platforms, and other hyperscalers. CoreWeave's revenue backlog has grown faster than any cloud company in history.
CoreWeave stock currently trades at 7.7 times sales, a very reasonable valuation for a company whose revenue is projected to increase at 82% annually through 2027. Indeed, among 33 analysts, CoreWeave has a median target price of $125 per share. That implies 58% upside from its current share price of $79.
NASDAQ: CRWV
Key Data Points
Arm: 5% of Nvidia's portfolio
Arm is a semiconductor company that designs central processing units (CPUs) and related technologies like compute subsystems and software development tools. Rather than sell chips, Arm licenses intellectual property (CPU architecture and processor blueprints) to other companies that want to build custom chips for personal computers, data centers, and automotive systems.
Arm CPUs have long been the industry standard in mobile devices because they are about 50% more power efficient than x86 chips from AMD and Intel. The company holds 99% market share in smartphone chips. However, Arm has also become a major player in data centers for the same reason. Its power efficient architecture helps reduce the cost of artificial intelligence.
Beyond that, Arm has an attractive business model. By licensing its architecture and pre-designed processor blueprints, the company affords its clients the flexibility to build processors to their required specifications. Several technology giants have found that value proposition very compelling. Arm's clientele includes Apple, Amazon, Microsoft, Alphabet, Nvidia, and Tesla.
Arm has gained more than 10 percentage points of market share in data centers in the last three years, and demand remains robust. Data center royalty revenue (which is collected as a percentage of every chip sold) doubled in the most recent quarter due to continued deployments by hyperscale companies.
Arm's adjusted earnings grew 30% in the last quarter, and Wall Street expects adjusted earnings to increase at 23% annually through the fiscal year ending in March 2027. That makes the current valuation of 68 times earnings look rather expensive. But Arm beat the consensus earnings estimate by an average of 11% during the last six quarters.
The current valuation would be more reasonable if that trend continues. I think CoreWeave is the more attractive option, but Wall Street anticipates substantial upside in Arm. Among 40 analysts, the stock has a median target price of $180 per share. That implies 57% upside from its current share price of $115.
