SoftBank Group, a Japanese technology investment company, has seen its stock rise significantly following the surge in stock value of its chip-designer unit, Arm Holdings. Arm’s stock climbed by 20% in after-hours trading after the company announced a better-than-expected outlook. This news has fueled investor optimism, leading to a rise in SoftBank Group’s shares.
Arm Holdings, a British chip designer, exceeded analyst expectations by forecasting $850 million to $900 million of sales in its current quarter. This surpassed the predicted $779 million in a FactSet analyst survey. The company also raised its annual sales guidance from $3.08 billion to as much as $3.21 billion. Arm is benefiting from the increasing investments in artificial intelligence (AI) and the demand for chips that support this technology. While Arm’s circuits are already dominant in mobile phones, the company is making progress in providing chips for data centers where AI computations are performed.
The positive performance of Arm Holdings has had a direct impact on SoftBank Group’s stock. SoftBank Group shares rose as much as 9.6% earlier on Thursday morning and were recently 8.3% higher at 7,168 yen. This surge in stock value is particularly significant for SoftBank Group, as the company is expected to report its third-quarter results later on Thursday.
Analysts predict that SoftBank Group will announce a net profit of Y247.25 billion ($1.67 billion) for the three months ended December 31st. This would mark the company’s first quarterly profit after four consecutive quarters of losses. In comparison, SoftBank Group recorded a net loss of Y783.415 billion in the same period last year.
The improved guidance from Arm Holdings and the anticipated positive financial results for SoftBank Group highlight the company’s potential for growth in the technology sector. SoftBank Group’s strategic investments in companies such as Arm Holdings have positioned it well to benefit from the increasing demand for AI-related technologies. As the market for AI continues to expand, SoftBank Group’s stock is likely to see further gains.
In conclusion, SoftBank Group’s stock has experienced a significant rise following the surge in stock value of its chip-designer unit, Arm Holdings. Arm’s better-than-expected outlook and increased sales guidance have fueled investor optimism. This positive performance is expected to translate into a quarterly net profit for SoftBank Group, marking a turnaround from previous losses. The company’s strategic investments in AI-related technologies position it well for future growth. As a result, SoftBank Group’s stock is likely to continue its upward trajectory in the technology market.
