Nvidia (NASDAQ:NVDA) can add boosting a struggling company to its list of recent accomplishments. The Silicon Valley giant recently disclosed investments in several of its tech sector peers, including Nano-X Imaging (NASDAQ:NNOX). The medical imaging company isn’t well known outside of its niche market, but since news broke of Nvidia’s stake, NNOX stock has been surging.
Nvidia doesn’t rank among the company’s top shareholders or even close to it. But its investment has given the stock a much-needed catalyst, thrusting Nano-X into the spotlight and sending shares up by more than 50% in just a few hours.
Nano-X Imaging isn’t the only company that Nvidia is betting on. However, out of the five stocks named in the recent 13F filing, NNOX is the best performer so far today. This could be the start of a turnaround for the little-known company that plunged in June 2023 and hasn’t been able to make up the ground it lost.
What’s Happening With NNOX Stock
NNOX stock is still one of today’s top market movers despite losing some momentum since surging 125% this morning. As of this writing, it is up more than 52% for the day. This is a better performance than SoundHound AI (NASDAQ:SOUN) or China’s Tusimple Holdings (OTCMKTS:TSPH), both of which received larger investments from Nvidia. In fact, out of the five companies named, Nano-X is the chipmaker’s smallest position, encompassing only 379,856 shares.
This comes at a time when the company certainly needed a boost. NNOX stock has been declining since the summer of 2023, failing to demonstrate any sustainable growth. The company managed to hover among penny stock status but could never stay too far above it, rarely rising above $6 per share. Now, NNOX is nearing $10 and could easily pass it today.
This performance led to a negative sentiment from many experts. In September 2023, as NNOX continued trending downward, InvestorPlace contributor Chandler Capital issued a bearish take on the stock, speculating:
“We immediately see an excessive valuation that is seemingly only propped up by its most loyal of investors. With a trailing P/S of 36x compared to its industry median of 3.52x, this stock is certainly overvalued. Until this company can reach a more reasonable valuation and stable metrics, I highly advise all investors to stay away from this ticking time bomb.”
Clearly, Nvidia disagreed with this assessment. The tech sector leader has spent the past year making market history. Most recently, it became the world’s third most valuable company by market value. While it may not stay there for long, Nvidia is the undisputed leader of the artificial intelligence (AI) boom, and its power cannot be understated. Therefore, no one should ignore the bets it has made on companies in the tech space.
What Comes Next
Given Nano-X’s lack of status among tech stocks, it’s hard to say if its current momentum will continue. However, the company is now on the radar of the entire investing world after only having two takes from Wall Street analysts. Investors are paying attention to the stocks that Nvidia is betting on. That said, Nano-X does operate in a lucrative field. The medical imaging market is expected to expand at a compound annual growth rate (CAGR) of 6.2% between 2024 and 2030. If it does, NNOX stock will likely continue making progress.
On the date of publication, Samuel O’Brient did not have (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.
