Investors’ insatiable demand for artificial intelligence (AI) investment is evident in the recent stock price surge of a drug designer firm, Recursion Pharmaceuticals Inc., immediately after it received a $50 million investment from Nvidia. The AI-linked chipmaker’s involvement propelled the value of Recursion Pharmaceuticals, which utilizes machine learning to develop new drugs, causing its stock to more than double as the market opened and ultimately ending Wednesday with an impressive 78% gain. It’s a promising indication that the AI frenzy may now be extending to the struggling biotechnology sector, which has been negatively impacted by the Federal Reserve’s interest rate hikes. Prior to this significant upswing, Recursion had seen a year-to-date decline of 12%, but now its shares have risen by 57%.
This influx of funds solidifies Recursion’s position as the leading AI-driven biotech firm, as highlighted by Gil Blum, an analyst at Needham & Co. In a note to clients, he emphasized that this collaboration grants Recursion access to the world’s most formidable AI computing company. Other companies in the field, using alternative algorithms to discover new targets, also experienced positive gains. Both Exscientia Plc and AbCellera Biologics Inc. saw a 12% surge, Relay Therapeutics Inc. climbed by 7.1%, and Schrodinger Inc. rose by 3.6%.
This remarkable rally in Recursion Pharmaceuticals following Nvidia’s investment underscores the fervor surrounding AI in the market. It is an exciting development that showcases the potential for AI-powered advancements in the biotechnology industry, and it will be fascinating to observe how this trend continues to unfold.
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