According to a recent regulatory filing, chipmaker Nvidia (NASDAQ: NVDA) now owns a stake in Nano-X Imaging (NASDAQ: NNOX), a small Israeli medical device company that makes X-ray machines. While the investment was modest, that didn't prevent investors from reacting ebulliently to the news -- Nano-X's shares skyrocketed more than 50% the following day.

Does Nvidia's involvement have the potential to be transformative for the smaller business, and is it possible that there's more upside in store for shareholders? Or is the market missing something?

It's worth noting that Nvidia's shares of Nano-X are worth a grand total of $379,856, which is just a smidgen in comparison to its market cap of around $572 million. So at first glance, it looks like the market is massively overreacting since it's difficult to imagine precisely what the company could even do with such a small investment. Still, appreciating the context is key to understanding why the market isn't entirely over the top with its aggressive bidding.

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Source Fool.com