Nvidia has dramatically reshaped its investment portfolio, selling stakes in Applied Digital and ARM Holdings while taking a $5 billion position in Intel. The AI chip giant's fourth-quarter activity marks a significant shift from its previous holdings, which included a stake in Arm dating back to its 2023 IPO when Nvidia invested in the semiconductor licensing company.

Applied Digital, an AI data center operator that rents out Nvidia GPUs, saw its revenue grow 177% year-over-year in its latest quarter while narrowing losses from $143 million to $31.4 million. However, with an $8.7 billion market cap and expensive valuation, Nvidia apparently decided to exit the position. ARM Holdings has more than doubled since its IPO, reaching a $134 billion market cap, potentially prompting Nvidia to take gains on its investment.

Intel represents Nvidia's bet on the legacy chipmaker's AI transformation. The company is investing over $100 billion in U.S. manufacturing facilities and developing an open-source, full-stack AI solution including the next-generation Jaguar Shores GPU. While Intel's stock has jumped 73% in the past year, it remains down 29% over five years, reflecting the challenges of competing against Nvidia and Advanced Micro Devices in the GPU market.