Business Essentials for Professionals


Stocks Of Softbank Get A Hike In The AI Chip Craze Prior To Arm’s IPO

Stocks Of Softbank Get A Hike In The AI Chip Craze Prior To Arm’s IPO
Shares of SoftBank Group Corp. increased 5% in early Friday trading as the technology investor—which is contemplating an IPO of chip designer Arm—got sucked into a buying frenzy for equities in the semiconductor and AI industries.
The Japanese conglomerate's shares have increased 17% since last week's closure despite being negatively impacted by the declining value of its IT portfolio.
However, they have only gained 6.4% year to far compared to 39% growth in the Philadelphia SE Semiconductor Index and 172% growth for American chipmaker Nvidia Corp, which is projected to benefit from investment in AI.
For the first time since February, SoftBank surpassed the psychological threshold of 6,000 yen on Friday.
"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".
Advantest Corp. and Tokyo Electron Ltd., two equipment manufacturers that have seen year-to-date gains of 109% and 50% respectively, were other winners from the fervour around chip-related stocks.
Masayoshi Son, the CEO of SoftBank, has claimed that the development of artificial intelligence is what motivates his investments. He has, however, also been caught up in the recent enthusiasm for generative AI, which its supporters liken to the advent of the internet.
"He feels that 'finally my time has come'," SoftBank Chief Financial Officer Yoshimitsu Goto told reporters at a earnings briefing last month.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc