“The Nvidia effect”: after the increases, what happens to the stocks that flew due to one announcement

The year 2025 has just begun, and the share of the Israeli technology company Locust Robotics a company Autotec established and managed by the entrepreneur Kobe Marancowhich ended 2024 at $1.86, is now trading at $4. Since the low to which it fell in November, Arba has already climbed by 148%, an increase that mainly came at the beginning of the current trading week: Arba shares jumped 52.1% on Monday in a trading volume more than 300 times higher than the average for the stock. This, against the background of a report of cooperation with the giant EChips Nvidia .

● The stock jumped in anticipation: the CEO of Nvidia revealed a series of new products tonight
● Thanks to an agreement with Nvidia: the Israeli company that jumped sharply on Wall Street

Arba is not the first to enjoy the “stardust” of the chip giant. Just this week, another Israeli Autotech company reported cooperation with Nvidia – Inviz And the stock jumped 29% in early trading on Tuesday, and almost a year ago, the Israeli technology company Beamr announced a similar move, and its stock rose almost eightfold in three trading days.

Later, Nvidia published for the first time a quarterly report on its holdings in the shares traded thereWell Street. At the time, her investment portfolio included five stocks – and all of them soared by double-digit and even triple-digit rates in the days after the report was published. One of them is the Israeli Nano-x, from the field of medical imaging, which jumped 104% in the two days after that report last February, after it became known that Nvidia holds a negligible percentage of its shares. In fact, Nvidia did not directly invest in Nanox at all, but was an early investor in Zebra Technologies through its investment fund, and in 2020 Zebra merged into Nanox.

It seems that in all these cases the shares enjoy positive momentum thanks to the “stamp of approval” of Nvidia, under the management of the founder Jensen Huang. Nvidia is seen in the market as the industry leader, and as the one whose AI development is largely based on its chips. The AI ​​revolution led to a dizzying increase in both Nvidia’s results and its stock, which jumped almost tenfold in the last two years, to a price that reflects the company’s value at $3.66 trillion (second only to Apple in market value).

Not only Israeli women

By the way, not only Israeli companies benefited from the “Nvidia premium”. The shares of overseas companies also jumped, after it became known that they are also held by Nvidia, including the American biomedical company Recursion Pharmaceuticals, which jumped by 20%, an autotech company called TuSimple, which jumped by 65%, a voice recognition company – SoundHound AI – which climbed at 69%, as well as another chip giant in its own right, the ARM company from the UK, which was issued in 2023 and whose stock rose even before Nvidia’s report.

Other stocks that have jumped in recent months thanks to the connection to Nvidia are the American Serve Robotics and Applied Digital. In July, Nvidia reported the acquisition of Serve Robotics, which was previously spun off from Uber, and develops AI-based delivery robots. In response, the stock jumped 257% in three trading days. In September, Nvidia participated in an investment round in Applied Digital, a provider of solutions for the AI ​​field, and the stock jumped 66% on the day of the report.

Another example, from recent days, is Cerence AI, which deals in the field of voice recognition. It announced on Friday the expansion of an existing collaboration it has with Nvidia, and in response its stock jumped 155% in the two trading days since then.

Does the momentum hold?

But after the initial enthusiasm of investors about the connection to Nvidia, has the momentum continued? The answer is not unequivocal and it is clear that many other factors influence the stock prices besides Nvidia. In any case, in some cases, the prices to which the shares soared following the report of their connections with Nvidia did not last long.

Israel’s Bimmer, for example, is trading today at a value of 72 million dollars – higher than its value before the report on the cooperation with Nvidia, but about 70% lower than the peak to which it jumped in the days after the report. However, the company then knew how to take advantage of the momentum in the stock and carry out a quick capital raising of 12 million dollars, which improved its balance sheet. Nanox is also trading today at a value lower than that which came following the enthusiasm for the Nvidia holding, and it has fallen by about 23% since then. Recursion, which surged during the same period for the same reason, lost 37%.

On the other hand, the shares of Serve Robotics, Applied Digital and SoundHound continued to climb even after the initial enthusiasm for the Nvidia issue. ARM is also trading at a higher price, which reflects a value of about $156 billion – more than three times the 2023 offering.

Locust’s contract

As mentioned, the next test cases will be those of Arba Robotics and Invis shares. The jump in price brought the Israeli company’s market value to $341 million, a little more than three years after it was merged into a SPAC at a value of about half a billion dollars.

Arba develops chips for car imaging radars. Its sensor provides a high-resolution image, and is therefore suitable for safety-related applications as well as the autonomous vehicle world. The report on the collaboration with Nvidia was published as part of the annual CES technology exhibition, which is currently being held in Las Vegas. According to the report, the collaboration is aimed at improving free lane mapping and AI-based capabilities.

The company stated that the combination of Araba’s radar and Nvidia’s vehicle computing platform enables fast and powerful AI processing that improves the mapping of the free lane for driving – and will enable “hands-free” driving and real-time safety applications. In the announcement, Areva stated that its radar offers an extremely high resolution, which enables accurate detection of objects in urban environments and on highways in challenging environmental conditions, and the technology significantly improves the detection capabilities of small obstacles, without false alarms. Marenko noted that the company is “working to redefine the field of vehicle safety,” and that it is promoting the vision of safe driving without traffic accidents, and ultimately, the autonomous vehicle.

The announcement not only boosted Arba’s stock to a value it had not traded in for a year and a half, but also brought it very close to the amount of NIS 103 million that is expected to enter its coffers. A few months ago, Arba issued convertible bonds on the Tel Aviv Stock Exchange, and according to the prospectus, the money was transferred to a trust and it was determined that it would be transferred to the company with the fulfillment of two conditions pending until the end of March 2025: the company would win a tender or contract to supply its products to one of the leading car manufacturers, and also an average exchange rate The lock-up of its shares in Nasdaq for 30 consecutive trading days will not be less than 3.1 dollars, and the cumulative trading turnover will not be less than 300 thousand shares per day.

In July, Arba announced that it had been selected by one of the major car manufacturers to develop the imaging radar, which advanced the first condition, but the stock price was far from the required threshold until the rise this week. Thanks to the huge trading turnover in the stock, it met the condition of the cumulative trading turnover, so it will not be required to wait for 30 days. Although the conditions have not been fully met, the bondholders may have an economic incentive to have the money transferred from the trust to the company, and they may convert the bonds into Arba shares.