Key Points
- Nvidia reportedly in talks with Britain's Arm about a US IPO.
- The chipmaker tried to buy Arm outright, but was thwarted by regulators.
- Nvidia shares traded near fair value – the time high set last month on the news.
Shares of Nvidia (NVDA) rose more than 2% in early trading on Wednesday after a report said the chipmaker was renewing talks with UK-based chip designer Arm in the prospect of a possible initial public offering (IPO).
Nvidia shares neared their all-time high after the Financial Times reported that Nvidia could be a key investor in the British company's proposed IPO in the United States. Nvidia is said to be one of many partners that will also include rival Intel (INTC). The British company hopes that these partners will take a long-term stake at the IPO stage.
Nvidia attempted to to buy Arm outright in 2020 from its owner, Japan's SoftBank Group, for $66 billion, but scrapped the effort last year after regulators challenged the deal.
The report indicates that potential investors are still trading with Arm on its valuation. Nvidia is apparently aiming for $35-40 billion, while Arm is eyeing $80 billion.
Arm might be particularly interested in Nvidia because of the company's reach into artificial intelligence (AI), which is central to Arm's growth plans.
With earnings Wednesdays, Nvidia shares have nearly tripled in value this year so far. wp-content/uploads/2023/07/a6137caae96296d12eef6bc0680840d6.png” />
YCharts
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Source: investopedia.com