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AI Chip Gold Rush Pumps Up SoftBank Shares Ahead of Arm IPO

The Japanese conglomerate, whose tech portfolio has slumped in value due to an array of troubled investments, passed the psychological level of 6,000 yen on Friday


Some of the world's biggest tech giants have agreed to invest in Softbank's listing of Arm on the Nasdaq.
SoftBank-owned Arm sells blueprints that chip designers use to build their own hardware. Photo: Reuters.

 

Shares of Japan’s SoftBank Group are seeing quick gains ahead of a planned initial public offering (IPO) of the technology investor’s chip designer Arm, as investors across the globe rush to add chip and artificial intelligence-related stocks to their portfolios.

Tokyo-listed SoftBank shares jumped more than 4% on Friday, taking total gains since last week’s close to almost 15%.

Still, they are up only 6% year-to-date, compared with 172% for US chipmaker Nvidia – an expected beneficiary of investment in artificial intelligence (AI) – and 39% in the Philadelphia SE Semiconductor Index.

 

Also on AF: SoftBank Shares Soar as Arm Rolls Out New Smartphone Chip Tech

 

The Japanese conglomerate, whose tech portfolio has slumped in value due to an array of troubled investments, passed the psychological level of 6,000 yen on Friday for the first time since February.

It closed just shy of the level as traders booked weekly profits in the second half of trade.

“We expressed a view that SBG stock will rally ahead of the ARM IPO later in the year… But given [the] market’s fascination for semi-stocks, we think it makes sense to move early,” Jefferies analyst Atul Goyal wrote in a client note, upgrading his recommendation on the stock to “buy”.

SoftBank CEO Masayoshi Son, who has argued that the rise of AI drives his investments, has also been caught up in recent enthusiasm for generative AI, which proponents compare to the arrival of the internet.

“He feels that ‘finally my time has come’,” SoftBank Chief Financial Officer Yoshimitsu Goto told reporters at an earnings briefing last month.

Other beneficiaries of enthusiasm for semiconductor-related stocks included equipment makers Advantest and Tokyo Electron, which have climbed 109% and 50% respectively year-to-date.

 

  • Reuters, with additional editing by Vishakha Saxena

 

Also read:

S&P Cuts SoftBank Rating Deeper Into Junk Over Alibaba Sale

SoftBank’s Arm Hoping to Raise $8 Billion From Mega US IPO

Nvidia Feels ‘Perfectly Safe’ Relying Heavily on Taiwan Chips

Warren Buffett Says He Prefers Investing in Japan to Taiwan

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]

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