Stocks That Own Stocks: Know What You're Getting

Like Russian nesting dolls that fit inside one another, more companies are adopting an investing approach popularized by Warren Buffett: holding shares in other companies.

When thinking about that approach, a conglomerate like Buffett's Berkshire Hathaway (BRK.B) may come to mind first, but it's not the only example, or the only way companies go about it.

Some companies do want to emulate Berkshire, the shares of which have outpaced the broader market for decades—thanks in part to its heavy holdings in successful companies.

Others aren't trying to become "second-generation Berkshires." Instead, they're trying to grow their business without navigating complicated and expensive acquisitions. It's an emerging trend among companies that generate large piles of cash.

For instance, in 2022, after Nvidia (NVDA) ran into antitrust concerns that prevented it from acquiring Arm Holdings (ARM), it instead bought ARM shares shortly thereafter and later sold its stake in early 2026 for between $140 million and $155.8 million, according to Securities and Exchange Commission (SEC) filings.

Nvidia is also an investor in OpenAI, which as of June 2026 hadn't gone public yet. During Nvidia's earnings call last November, CEO Jensen Huang was asked about how the company allocates capital and decides on investments, specifically in regard to OpenAI.

"We are expanding the reach of our ecosystem, and we're getting a share and investment in what will be a very successful company," Huang said then.

Over the last few decades, companies with extra cash traditionally have used it to pay dividends or buy back shares, which Nvidia also does. While Huang added that Nvidia will continue to execute stock buybacks, he emphasized the importance of expanding Nvidia's reach through investments.

For instance, Nvidia also bought $2 billion worth of CoreWeave (CRWV) shares in early 2026, according to SEC filings, paying an average of $87.20 per share. CoreWeave recently traded at $107, representing a tidy and relatively quick gain for Nvidia. "The investment reflects Nvidia's confidence in CoreWeave's business, team, and growth strategy as a cloud platform built on Nvidia infrastructure," the two companies said in a joint press release.

In addition, Nvidia bought shares of AI cloud company Nebius Group (NBIS) in March 2026, investing another $2 billion.

"It's the job of any company to invest its money in what is in the best interest of shareholders, which means where it finds the best value or the highest potential of increasing the return on that money for shareholders," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR). "It could be buying back its own stock, it could be investing in the business, or it could be investing in other businesses."

Nvidia isn't alone.

Advanced Micro Devices (AMD), an Nvidia competitor, recently said it acquired 200,000 shares of Xanadu Quantum Technologies (XNDU), a Canadian quantum computing hardware and software company that went public in March 2026. AMD also added 65,000 shares of Marvell Technology (MRVL), an AI infrastructure stock.

That means investors who buy AMD shares also gained indirect exposure to Xanadu and Marvell. AMD's stake in Marvell was worth about $11.3 million by mid-May 2026—based on its then-price of $179. That was a nice jump from an average purchase price of about $99, according to AMD's 13F filing with the SEC. The original investment was around $6.5 million, giving AMD a nearly $5 million gain.

Many of Nvidia's and AMD's share investments are in companies they're partnering with, which means their investments help finance those partners. This isn't necessarily a bad thing, "but it's not organic growth, so to speak," Peterson said.

"A company like Nvidia, with a CEO like Huang, has one of the most informed, knowledgeable perspectives on where AI is going. As a result, perhaps these investments reflect where Nvidia sees value as the AI buildout continues," Peterson added. "In that light, they'd be doing their job well in serving shareholders best."

Nvidia and AMD aren't the only tech-related companies buying shares of other firms. Amazon (AMZN) and Alphabet (GOOGL) own stakes in private companies that may go public soon. For instance, Alphabet invested $10 billion in Anthropic in April, with another $30 billion potentially to follow if Anthropic hits specific performance targets, according to Bloomberg.

"To me, the behavior of these tech companies investing in companies they do business with seems most similar to the internet buildout, and it wouldn't surprise me if there was similar behavior with the railroad buildout and other tectonic innovation shifts," Peterson said.

These approaches differ from those of firms like Markel Group (MKL), which Barron's calls "a mini Berkshire," and Fairfax Financial Holdings (FRFHF), a Canadian insurer that also cites Berkshire as an example. Insurance firm Markel has a $12 billion equity portfolio that includes non-insurance holdings, while Fairfax holds stocks ranging from Orla Mining (ORLA) to Under Armour (UAA).

The actions of these shouldn't be confused with what Nvidia and AMD are doing, since investments by the latter two are mainly tied to the AI theme. Berkshire and like-minded firms evaluate businesses on valuation and where they believe money will grow.

Nvidia's $2 billion investment in CoreWeave's Class A common stock at around $87 per share early in 2026 quickly paid off, as CoreWeave shares popped to $108 by mid-May. That would have added $480 million to Nvidia's coffers at a 24% gain on the original investment, though it's still early days.

That gain of less than $500 million pales versus Nvidia's quarterly revenue that hit $68 billion in the final quarter of the 2026 fiscal year, but $500 million is still a meaningful sum, and losing that much could still affect Nvidia's balance sheet in a minor way.

It also reflects a decision by Nvidia on how to use its money, one that some might question.

Nvidia returned $41.1 billion to shareholders in the form of shares repurchased and cash dividends during fiscal 2026 and had $58.5 billion remaining under its share repurchase authorization when that fiscal year ended. This could mean investors have little to complain about if Nvidia decides to invest some of its cash in shares of other companies—often ones it partners with, like CoreWeave—rather than use it for buybacks, dividends, or its own research and development.

If Nvidia's stock investments headed south, however, some investors might see flaws in the approach. Nvidia's quarterly $0.25 per share dividend is relatively small compared with many S&P 500^® Index dividend payers—though not necessarily for those in the tech sector—despite the company's 75% gross margins. Nvidia did announce a hefty share buyback in May 2026, however.

Also, there's growing investor concern about so-called "circular financing" among AI firms. Investments by those firms in stocks of companies they're partnering with arguably fit that bill and put more of their eggs in one basket if the AI market turns sour at some point.

Another consideration is how much visibility a company has when it buys shares of another. Company leaders typically have 20/20 insight into their own businesses—assuming they're doing their jobs. They likely have less knowledge about the companies they buy into. If a company begins to take heavy stakes in another one, it's worth checking the track record to see if leadership has had success doing this or a history of misreading the market.

With Berkshire, investors often buy shares because they believe Berkshire knows best how to invest in and manage companies. It's the secret of the firm's success.

If Nvidia or Advanced Micro Devices decide to allocate excess cash to stakes in partner companies, investors may see it as a slight risk with possible solid returns. The investments aren't likely to significantly move the needle but may help drive the ultimate goal of these companies to have a hand in all facets of the business, without the cost (and face antitrust concerns) of trying to buy the smaller firms outright.

The counter to that is if AI goes south, more of Nvidia's money could be at risk because CoreWeave shares would likely fall with those of Nvidia, giving investors less cushion. A company that's paying dividends and buying back shares as the share price falls often has a longer runway with investors than one that's suffering share losses and not giving back as much in regular checks to long-term investors, and Nvidia is starting to send more back to investors via those channels lately.

Still if increased dividends and buybacks are what an investor wants, they might be better off considering investments outside of tech in the first place.