Does Nvidia's AI for Biotech Make It a Buy?
Even though it's one of the hottest and most-discussed artificial technology (AI) stocks around, most investors probably don't know that Nvidia (NASDAQ: NVDA) is an aspiring competitor in the field of biotechnology. But it's not about to start developing drugs. Instead, it's helping biotechs and pharma businesses discover the best candidates to develop into medicines using its computing resources and several AI tools built for the purpose.
Does this juggernaut's ongoing diversification into a new sector bolster the bull thesis for buying it, or is it doomed to be a victim of di-worse-ification and the inefficiencies that follow? Let's answer that question by analyzing exactly what Nvidia is planning to do, who's collaborating with it, and how much money it's making as a result.
The first thing for investors to appreciate about Nvidia's biopharma services segment is that it isn't even mentioned in the company's first-quarter earnings report for its fiscal 2024 year. In its investor materials, biopharma services are likely lumped into the category of "other revenue," which accounted for around 1% of its roughly $7 billion in sales for Q1. So this isn't an opportunity that's going to be immediately exciting -- more likely, it will be a slow-burning contributor to its voracious growth, at least for now.
Source Fool.com
