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SoftBank Sees Massive Windfall as Arm Shares Surge


SoftBank Group, the Japanese technology holding company, is reaping the benefits of a surge in Arm Holdings shares following its earnings report. Arm, a chip design firm that was acquired by SoftBank for $32 billion in 2016, went public in September 2023 with an IPO priced at $51 per share.

After the IPO, SoftBank retained an Arm equity stake of over 90%, equivalent to 929.7 million shares. On Wednesday, Arm’s stock soared by 31.8% to reach $101.61, nearly twice the IPO price and the highest level since the company went public. This substantial increase in stock value boosted SoftBank’s Arm position to $94 billion, far surpassing SoftBank’s own market cap of $66 billion.

While SoftBank is typically traded at a discount to its net asset value, the surge in Arm’s shares is likely to push up SoftBank’s stock price when trading begins in Tokyo.

Arm’s strong performance can be attributed to the growing demand for artificial intelligence (AI). As new devices require Arm’s powerful and energy-efficient compute platform, licensing growth has been driven by the AI wave, according to Arm CEO Rene Haas.

Arm reported revenue of $824 million for the December quarter, surpassing the Street consensus forecast of $762 million. Additionally, the company projected revenue of between $850 million and $900 million for the March quarter, significantly exceeding the previous Street consensus of $779 million.

SoftBank is set to announce its December quarter financial results on Thursday morning.

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