Amazon should be an anchor investor in the; one of the biggest IPOs this year, and it could help boost the company's cloud business.
Bloomberg reports that Amazon (AMZN) is in talks to become an anchor investor in the initial public offering (IPO) of Arm Ltd., a British semiconductor and software design company.
Key Takeaways
- Amazon is reportedly in talks with SoftBank, a Japanese conglomerate, to become a lead investor in the IPO of UK-based semiconductor company Arm Ltd.
- Amazon's partnership could help strengthen its dominant position in the global cloud computing market and prevent rivals such as Microsoft's Azure from taking market share.
- The The IPO, which is expected as early as next month, could be one of this year's biggest, raising up to $10 billion in capital.
does the arm have to do with AWS?
Amazon's cloud-computing arm, Amazon Web Services (AWS), is already working with Arm to produce the AWS Gravitron processor. A more involved partnership with Amazon could prove lucrative for Arm given AWS' dominance in the global cloud computing market.
(AWS) is the world's largest cloud services provider with a global market share of 32% in the first quarter. Microsoft's Azure (MSFT) and Alphabet's Google Cloud (GOOGL) had the second and third highest shares at 23% and 10%, respectively.
For Amazon, it's a chance to cement its dominance in the cloud industry. While AWS's market share has remained generally stable over the years, Microsoft's Azure has quickly caught up, growing its market share by 10 percentage points since 2017.
anchor
SoftBank (SFTBY), a Japanese conglomerate that has owned Arm since 2016, has contacted several companies as it seeks to raise funds for Arm's IPO, which is expected as early as September.
While SoftBank initially contacted big chipmakers like Intel (INTC) and Nvidia (NVDA), it has since extended its search for investors to big tech companies like Apple (AAPL), Amazon and Google parent Alphabet, whose products make heavy use of semiconductors. -drivers.
A boost for the IPO market in sotck exchange ?
Arm Potential The The IPO is likely to be one of the biggest this year and could raise up to $10 billion.
Such an offer could give a needed boost to the global IPO market, which has been struggling since early last year.
A bearish stock market, rising interest rates and general economic uncertainty have slowed demand for new offerings. There have been 615 IPOs globally so far this year, raising around $61 billion in capital. These figures are respectively down 5% and 36% compared to the first half of 2022, according to the consultancy firm EY.
While the U.S. IPO market has rebounded slightly from last year's lows, activity remains well below its 2021 peak. The first half of 2023 saw 63 IPOs in United States, down from 51 in the same period last year, but well below a peak of 416 throughout 2021. Revenues also fell precipitously, to 10.1 billion dollars in the first half, compared to $155.8 billion in 2021, EY reported.
Amazon shares fell by 1% in early trading Wednesday. They are up more than two-thirds so far this year, while those of Arm owner SoftBank are up 14% over the same period.
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Source: investopedia.com
