Recursion Pharmaceuticals (NASDAQ:RXRX) stock is the talk of Wall Street lately. Indeed, RXRX soared more than 120% Wednesday after Nvidia (NASDAQ:NVDA) announced it would invest $50 million into the biotech firm to use artificial intelligence (AI) for drug discovery.
According to Recursion’s Chief Executive Chris Gibson, Nvidia’s investment in the company will result in staggering company growth:
“With our powerful dataset and NVIDIA’s accelerated computing capabilities, we intend to create groundbreaking foundation models in biology and chemistry at a scale unlike anything that has ever been released in the biological space.”
The terms of the deal are unclear, as per the private nature of the investment. That said, the results have already spoken for themself. Recursion’s market capitalization rose by close to $1 billion in the aftermath of the deal’s announcement, hitting $11 per share, the highest level since November 2022.
The Utah-based company apparently has biological and chemical datasets exceeding 23,000 terabytes. The large and constantly-growing nature of Recursion’s database means an AI model has plenty of opportunities to learn and grow in its analytical efficiency.
“I think we’re focused on the long term and at Recursion, we believe that by leveraging technology, automation, the newest tools in biology and chemistry — we have an opportunity to speed up the pace and speed of drug discovery in the coming years,” Gibson told CNBC.
RXRX Stock Slows Its AI-Fueled Roll
Despite the promising news, it seems Recursion investors are a bit concerned over the validity of yesterday’s jump. Indeed, RXRX stock is down about 1% today, erasing some of yesterday’s gains.
Interestingly, Nvidia stock is on the climb in the wake of yesterday’s Recursion investment. Indeed, NVDA is up over 2% today, adding to yesterday’s 2.68% gains.
Reasonably so, Nvidia’s investment into Recursion represents just the latest example of the increasing overlap between AI and biotech. If you recall, last April, Moderna (NASDAQ:MRNA) stated it will use AI to enhance the development of its RNA-based technology. This was closely followed up by the launch of Google Cloud’s AI tools designed to enhance biotech and pharmaceutical companies’ drug development.
According to Nvidia CEO Jensen Huang, the potential use cases for AI within the medical field are broad and compelling.
“Generative AI is a revolutionary tool to discover new medicines and treatments,” Huang said. “We are delighted to collaborate with Recursion’s world-class team, which is doing pioneering work.”
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
