Shares of GPU titan Nvidia (NASDAQ:NVDA | NVDA Price Prediction) may have been stuck in a sideways channel for the past six months, but a lot has been going on behind the scenes amid the intense sideways action. Of course, Nvidia isn’t solely to blame for the recent consolidation. In fact, the Magnificent Seven players have really run out of steam in the past quarter or so.
Despite the relatively lackluster ride for Nvidia shareholders, shares of the AI chip king have been more resilient than many of its Mag Seven peers, some of which are down well over 10%, with a potential bear market (that’s a 20% decline) in sight.
While Nvidia stock is far from the worst Mag Seven performer, it has been relatively muted compared to its red-hot semiconductor peers, especially the memory chip makers. As AI demand stays hot, the big question is whether Nvidia stock can break out after a lengthy pause.
Nvidia has been making big moves and bets, but shares have been stuck going sideways
As the technical saying goes, the longer the base, the higher in space. But will the path of least resistance be to the upside for Nvidia? Or will it be the bears, like Michael Burry from The Big Short, who will be proven right to bet against the GPU juggernaut as well as the broad AI trade?
Right now, it’s looking like it could go either way, with another flat week of trading in the books for Nvidia. What is encouraging is how quickly Nvidia was able to move on from concerns surrounding Greenland. What’s more, Nvidia has been making many deals with industry leaders. And it’s these such deals that I think could help AI move from expensive (and potentially wasteful) investment to a monetizable business that transforms the world and puts the bubble talks to rest.
Perhaps the biggest application of AI lies within the health sector. Whether we’re talking about medical screening or drug discovery, there’s certainly a lot of transformative potential.
Though, it’s really hard to tell when AI will release a blockbuster drug. Could it be just a matter of time? Or is that more of a sci-fi scenario that won’t be possible until another decade or more after large language model (LLM) makers have had time to improve and tailor their models?
Nvidia’s latest move into AI drug discovery is a big deal
In any case, there’s certainly excitement surrounding the field of AI drug discovery, and Nvidia is sure to be a major beneficiary as such a field looks to pick up traction. With Nvidia ringing in the new year with a $1 billion partnership with Eli Lilly (NYSE:LLY) for work on a co-innovation AI lab to transform drug discovery, the reality of the situation is that the two industry superpowers are already hard at work to advance the field.
It will be interesting to see how the collab goes in the next five years. With Nvidia committed to expanding its BioNeMo platform, there’s certainly potential to change how the labor-intensive, highly uncertain workflows involved in drug discovery are.
If Nvidia’s models, supercomputers, financial support, and wet-lab integration can get things moving along faster while keeping the pipeline of promising candidates packed, Nvidia may very well be setting itself up to become the go-to platform for drug discovery.
That would be massive and could pave the way for a new growth engine that changes the way investors think about Nvidia. Perhaps Nvidia is as much of an applied AI platform play as it is a GPU innovator. Either way, if healthcare breakthroughs do result from these strategic partnerships, I certainly wouldn’t want to be caught holding a bearish position in shares of Nvidia or any other AI innovator that’s gotten into the drug discovery market with the expertise of a leading biotech firm.
Could 2026 be the year when end-to-end biological AI shows what it’s truly capable of?
It’s really hard to tell. If the collab goes well, the partnership could certainly evolve in the next decade. Either way, the field remains worth watching as AI hopes to become exponentially more useful and, with that, more monetizable.
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