Nvidia Could Acquire SoftBank’s Arm Unit – Report

Nvidia Corporation (NVDA) is interested in buying SoftBank Group’s chip designing company, Arm Ltd. Citing people familiar with the matter, Bloomberg reported on Wednesday that Nvidia has approached the Japanese investment group in recent weeks about a deal for Arm.

Bloomberg stated that “A deal for Arm could become the biggest-ever acquisition in the chip industry.” The UK-based chip designing company was bought by SoftBank in 2016 for about $32 billion.

According to Bloomberg, SoftBank had been exploring options including a full or partial sale of the UK-based chip designing company. Reportedly, the investment group had approached Apple (AAPL) to gauge its interest but the latter shows no intention in pursuing a bid.

Arm’s chip designing and licensing operations would be a perfect fit for Nvidia. The acquisition would help the graphic chip maker enhance its chip designing capabilities and strengthen competitive position against Advanced Micro Devices (AMD) and Intel (INTC).

On July 7, Bank of America analyst Vivek Arya raised the target price on Nvidia to $460 from $420. The analyst stated that strong trends surrounding the gaming industry could boost Nvidia’s gaming sales in the second half of 2020.

NVDA stock has surged nearly 78% year-to-date, and analysts have an optimistic Strong Buy stock consensus. However, the average analyst price target of $404.87 implies a potential decline of 3% from current levels. (See Nvidia’s stock analysis on TipRanks).

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Amit Singh
Amit Singh has over eight years of strong experience (both sell-side and buy-side) in analyzing financial reports and filings as well as identifying strategic investment opportunities. Over the years, Amit has covered various industries and geographies, with a primary focus on consumer staples and the consumer discretionary sector. Amit’s background spans evaluating company portfolios, building complex financial models, writing financial articles, and identifying the overall financial worth of companies. He has a post-graduate diploma in finance.

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