The logo of semiconductor design firm Arm on a chip.
Jakub Porzycki | Nurphoto | Getty Images
Exactly two years ago, Nvidia’s attempt to purchase chip designer Arm from SoftBank came to an end due to “significant regulatory challenges.”
Masayoshi Son, SoftBank’s billionaire founder, has never been so lucky.
That agreement would have involved selling Arm for $40 billion, or just $8 billion more than SoftBank paid in 2016. Instead, Arm went public last year, and the company is now worth over $116 billion after the stock soared 48% on Thursday.
SoftBank still owns roughly 90% of the outstanding stock, meaning its stake in Arm increased by over $34 billion in a day.
But the rally is somewhat confounding when looking at how the market values Arm. Wall Street may start to get a clearer sense of how much investors are willing to pay next month, when the 180-day lockup period expires and SoftBank will have its first opportunity to sell.
Chipmakers Nvidia and AMD have been Wall Street darlings of late due to their central position in the artificial intelligence boom. Nvidia makes the bulk of the processors used for cutting-edge AI models like those that power ChatGPT, while large tech companies have also indicated their interest in purchasing competitive chips from AMD as they hit the market.
But Arm is now being valued at a much higher earnings multiple than either of those companies. As of Thursday’s close, investors are valuing Arm at close to 90 times forward earnings. That compares to a forward price-to-earnings ratio of 33 for Nvidia and 46 for AMD, which both have significantly higher multiples than other major chip stocks like Intel and Qualcomm.
In reporting better-than-expected quarterly results on Wednesday, Arm gave investors some new data to suggest that its growth rate could persist through the next fiscal year. Arm said it was breaking into new markets thanks to AI demand, and that its primary market, smartphone technology, was recovering from a slump.
‘Gain market share’
Arm has a different business model than Nvidia and AMD in that it’s largely a technology licensing company. Arm said its royalties business, in which billions of chips manufactured each quarter result in a small fee to use the company’s architecture, was surprisingly strong. That’s because it can charge twice as much for its latest instruction set, called Arm v9, which accounted for 15% of the company’s royalties.
“Arm continues to gain market share in the growth markets of cloud servers and automotive which drive new streams of royalty growth,” the company said in its investor letter.
Arm’s revenue forecast for the current quarter points to 38% annual growth at the midpoint of the range, marking a significant acceleration from recent periods. But for Nvidia, analysts are expecting growth of over 200% for the January quarter and almost that level the next period.
AMD has been growing much slower and is expected to remain in the single digits until the back half of the year, when expansion is expected to accelerate.
Lisa Su, president and CEO of AMD, talks about the AMD EPYC processor during a keynote address at the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019.
Steve Marcus | Reuters
While Arm has some AI chip development, its technology is oriented around the central processor, or CPU. AI chips are often graphics processors, or GPUs, which use a different approach to running multiple calculations at the same time.
Still, Arm says it stands to benefit from AI chips. CEO Rene Hass mentioned Nvidia’s Grace Hopper 200 chip, which will start shipping in finished systems in April, on a call with analysts. That chip combines one of Nvidia’s GPUs — an H100 — with a CPU that uses Arm’s Neoverse design.
“The drivers and direction of travel for Arm are as outlined at the time of its IPO, but the timing and slope is sooner and steeper due to AI.” wrote Citi analyst Andrew Gardiner in a note on Thursday. “Given we are in the very early innings of AI adoption, we expect Arm’s sales trends to remain robust into FY25/26.”
The company said that its backlog of expected licensing sales rose 42% on an annual basis to $2.4 billion.
For Son and SoftBank, the fortuitous scuttling of the Nvidia-Arm deal means an opportunity for the Japanese conglomerate to directly benefit from the growth in AI and the premium that Wall Street is placing on chip companies at the center of the action.
SoftBank on Thursday said its Vision Fund investment group logged a $4 billion gain in the latest quarter, after a brutal stretch of losses from bad bets like WeWork. SoftBank said in the December quarter that it booked an investment gain of $5.5 billion thanks to the Arm IPO.
If the stock can hold at these levels or even keep going up, more gains are in store.
“Arm is the biggest contributor to the global AI evolution,” SoftBank finance chief Yoshimitsu Goto said during an earnings presentation on Thursday. He even went so far as to call SoftBank’s investment pool an “AI-centric portfolio.”
Waymo announced it is now offering teen accounts for its self-driving car service Waymo One, beginning in Phoenix, Arizona.
Courtesy of Waymo
Waymo announced Tuesday that it is offering accounts for teens ages 14 to 17, starting in Phoenix.
The Alphabet-owned company said that, beginning Tuesday, parents in Phoenix can use their Waymo accounts “to invite their teen into the program, pairing them together.” Once their account is activated, teens can hail fully autonomous rides.
Previously, users were required to be at least 18 years old to sign up for a Waymo account, but the age range expansion comes as the company seeks to increase ridership amid a broader expansion of its ride-hailing service across U.S. cities. Alphabet has also been under pressure to monetize AI products amid increased competition and economic headwinds.
Waymo said it will offer “specially-trained Rider Support agents” during rides hailed by teens and loop in parents if needed. Teens can also share their trip status with their parents for real-time updates on their progress, and parents receive all ride receipts.
Teen accounts are initially only being offered to riders in the metro Phoenix area. Teen accounts will expand to more markets outside California where the Waymo app is available in the future, a spokesperson said.
Waymo’s expansion to teens follows a similar move by Uber, which launched teen accounts in 2023. Waymo, which has partnerships with Uber in multiple markets, said it “may consider enabling access for teens through our network partners in the future.”
Already, Waymo provides more than 250,000 paid trips each week across Phoenix, the San Francisco Bay Area, Los Angeles, Atlanta, and Austin, Texas, and the company is preparing to bring autonomous rides to Miami and Washington, D.C., in 2026.
In June, Waymo announced that it plans to manually drive vehicles in New York, marking the first step toward potentially cracking the largest U.S. city. Waymo said it applied for a permit with the New York City Department of Transportation to operate autonomously with a trained specialist behind the wheel in Manhattan.
Indian Prime Minister Narendra Modi arrives at the White House to meet with U.S. President Donald Trump on Feb. 13, 2025 in Washington, DC.
Andrew Harnik | Getty Images News | Getty Images
Elon Musk’s X said Tuesday that the Indian government ordered the company to block 2,355 accounts, including Reuters, in the country.
“The Ministry of Electronics and Information Technology demanded immediate action- within one hour- without providing justification, and required the accounts to remain blocked until further notice,” X’s global government affairs account posted.
The main Reuters account, along with ReutersWorld, was blocked Saturday for users in India, the news service said. Screenshots showed the message “Account withheld @Reuters has been withheld in IN in response to a legal demand.”
The Indian government’s Press Information Bureau told Reuters that no government agency had required blocking the account and said it was working with X to resolve the issue. The accounts were restored on Sunday.
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The statement by X on Tuesday is the latest development in an ongoing censorship legal battle between Musk’s social media site and the Indian government led by Prime Minister Narendra Modi.
X sued Modi’s government in March, accusing India’s IT ministry of unlawfully expanding online censorship to allow the easier removal of content.
Musk often refers to himself as a free speech absolutist and has said his takeover of Twitter was partly due to what he viewed as the unfair restriction of conservative views and voices.
The Tesla CEO swiftly made changes to moderation after he acquired the site, which he later renamed to X.
Robinhood CEO Vlad Tenev says it’s not “entirely relevant” that the trading platform’s so-called tokenized shares of OpenAI and SpaceX aren’t technically equity in the companies.
It comes after OpenAI raised concerns about the product, which is designed to give users in the European Union exposure to various U.S. stocks — including private companies, which are less liquid than publicly listed firms.
OpenAI last week warned that Robinhood’s stock tokens do not represent equity in the company and said in a post on X that, “any transfer of OpenAI equity requires our approval — we did not approve any transfer.”
Robinhood says its OpenAI stock tokens are “enabled by Robinhood’s ownership stake in a special purpose vehicle.”
“It is true that these are not technically equity,” Tenev, who co-founded Robinhood in 2013 with fellow entrepreneur Baiju Bhatt, told CNBC’s “Squawk Box Europe” Tuesday, echoing his initial response to OpenAI’s concerns.
Tenev said that OpenAI’s complex company structure enables institutional investors to gain exposure to the company through “various instruments, like equity upon the event of a conversion to a for-profit at a later date.”
OpenAI was initially founded as a non-profit organization. However, it has since evolved to include a for-profit entity, which is owned by the non-profit.
“In and of itself, I don’t think it’s entirely relevant that it’s not technically an equity instrument,” he said. “What’s important is that retail customers have an opportunity to get exposure to this asset” — even if it’s a private company — due to the disruptive nature of AI, he added.
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On Monday, the Bank of Lithuania, which is Robinhood’s lead authority in the European Union, told CNBC it was “awaiting clarifications” regarding the structure of the company’s stock tokens following OpenAI’s statement last week.
“Only after receiving and evaluating this information will we be able to assess the legality and compliance of these specific instruments,” Bank of Lithuania spokesman Giedrius Šniukas told CNBC. “The information for investors must be provided in clear, fair, and non-misleading language.”
Tenev said in response to the Lithuanian regulator’s comments that Robinhood is “happy to continue to answer questions from our regulators.”
“Since this is a new thing, regulators are going to want to look at it, and we’ve built this program in a way that we believe will withstand scrutiny — and we expect to be scrutinized as a large, innovative player in this space,” he told CNBC.