Shares of NVIDIA Corporation (NASDAQ: NVDA) rose by 3.53% in the late afternoon trading Wednesday. This surge came following a new report suggesting that Nvidia is in talks with a chip designer Arm, which is based in the United Kingdom (UK). The discussions are about the possibility of Nvidia becoming a major investor in Arm’s plan to go public in the United States (US).
The Financial Times revealed that NVIDIA may become a key investor in Arm’s plans for a U.S. IPO. This news has pushed Nvidia’s shares close to their all-time high. The IPO is expected to involve multiple partners, including Intel Corporation (NASDAQ: INTC), a rival of Nvidia. Arm hopes to secure long-term investments from these partners during the IPO stage.
In 2020, Nvidia attempted to acquire Arm entirely from its owner, Japan’s SoftBank Group, for $66 billion. However, the deal faced regulatory challenges, causing Nvidia to abandon the effort last year.
The report further highlighted ongoing negotiations between potential investors and Arm regarding its valuation. NVIDIA appears to be targeting a valuation range of $35 billion to $40 billion, whereas Arm is reportedly considering a higher value of $80 billion.
Arm appears particularly interested in Nvidia due to the latter’s strong presence in artificial intelligence (AI), which aligns with Arm’s growth plans.
This year has been exceptionally successful for NVIDIA. With the recent gains on Wednesday, the company’s shares have nearly tripled in value so far.
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
