To The Moon

For years, $NVIDIA Corp(NVDA)$ made most of its money in the gaming market, but more of its recent growth has been more fueled by GPU deployments in data centers. Now, this chipmaker has set its sights on the healthcare market.

Is that enough of a reason for investors to jump on this stock?

Last year, healthcare spending in the US hit an estimated whopping $4.7 trillion, accounting for about 18% of the country's GDP. And Nvidia has actually dipped its toes into this market before, like with the Clara AI platform for medical imaging in 2018.

But in recent weeks, Nvidia's been making some big moves. Like on March 18th, they rolled out 25 new "microservice" suites for healthcare institutions, which lets customers integrate generative AI into their existing apps.

In addition, Nvidia announced two major milestones with healthcare giants $Johnson & Johnson(JNJ)$ and $GE HEALTHCARE TECHNOLOGIES INC(GEHC)$ . JNJ is using AI in surgical procedures, and GEHC is developing ultrasound image analysis models with Nvidia's technology.

Nvidia isn't just helping biotech companies in drug discovery and development, they're getting in on the action too, like investing $50 million in Recursion Pharmaceuticals Inc.

AI can also boost the effectiveness of medical technology devices. For instance, JNJ is using Nvidia's IGX edge computing platform and Holoscan edge AI platform to develop new surgical instruments.

And finally, AI has the potential to streamline tons of administrative work for healthcare professionals, like scheduling appointments, handling insurance claims, and clinical documentation.

So, are these healthcare tentacles a reason to buy Nvidia stock?

While the profits in the US healthcare industry are tempting, it's not quite enough of a reason to jump on Nvidia stock just yet.

Firstly, the company's AI investments in healthcare are still in their infancy and haven't made a significant impact on its financial performance yet.

Secondly, Nvidia's stock is currently trading at a high valuation, and the price has already factored in the market's high expectations. If the actual results fall short of expectations, the stock price could see a significant correction.