We recently compiled a list of the 5 Stocks Jensen Huang’s Company is Betting On. In this article, we are going to take a look at where Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) stands against the other stocks.
Nvidia has a reputation for identifying high-quality companies in their initial stages and betting on their success. Last year, the company participated in more funding rounds than any other company in the US, behind only Alphabet. In the past, it has invested in startups like OpenAI, Perplexity, and Mistral, so when the chipmaker puts its money in some company, people are bound to notice.
A similar occurrence happened when the firm filed its recent 13F report. There were some clear omissions and needless to say, the stock prices of those companies tanked as the market digested the news of divestment. For those still on the list, the stock price reacted positively.
As the Santa Clara-based chipmaker proceeds with these investments, there is also the threat of regulators increasing the scrutiny based on anti-competitive practices. The firm is already facing the threat of anti-competitive charges in France and at home, and the recent acquisition of Run:ai continues to be under scrutiny. It must be said, however, that these challenges do not necessarily have any negative impact on the companies that made it to the 13F.
We decided to take a look at the stocks still on the 13F filing and find out what’s attracting the chipmaker to these companies. Do they have a moat? Are they still worth buying for the average investor? Or have the stocks already rallied too much?
A pharmacist in a hospital pharmacy stands next to a row of various drug containers.
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a biotech company that combines multiple areas like medicine, engineering, data science, and automation. The purpose of these efforts is to revolutionize and industrialize the process of drug discovery. With the backing of Jensen Huang and co, one can assume there is something special about this company and that its efforts have a higher chance of success compared to others doing similar innovations.
The company’s pipeline of drugs includes RC-617, a treatment for advanced solid tumors. The solid tumor market is expected to grow to $375 billion by 2034 and with the positive phase 1 results, RXRX is set to penetrate that market soon. The phase 2 data for REC-994, a treatment for Cerebral Cavernous Malformation, is also set to be released soon.
The risk of the next phases of these innovative medical treatments may not necessarily be positive, but it is the management and the tradition of innovation that provides the value here and investors should see the bigger picture rather than test phase data.
Overall RXRX ranks 3rd on our list of the stocks Jensen Huang’s company is betting on. While we acknowledge the potential of RXRX as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as RXRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
