Nvidia To Emerge As The Biggest Beneficiary Of AI, ARM Surges Every Day

British semiconductor design company ARM is soaring every day and is rapidly emerging as the largest beneficiary of AI, following Nvidia, which is said to be the largest beneficiary of artificial intelligence (AI).

On the New York Stock Exchange on the 12th (local time), ARM recorded $148.97, up 29.30% from the previous trading day. As a result, ARM soared by about 100% since the earnings announcement last Wednesday.

ARM announced its performance on the 7th. ARM said in its earnings call at the time that its earnings per share for the previous quarter were 29 cents. This is above market expectations of 25 cents. Last quarter’s sales were $824 million, significantly exceeding market expectations of $761 million. Sales last quarter surged 14% compared to the previous year.

In addition, it presented a strong outlook for the next quarter. The company forecast revenue of $850 million to $900 million and earnings per share of 28 cents to 32 cents for the next quarter. This is significantly higher than the market expectation of $780 million, or 21 cents.

“We are seeing strong demand for ARM technologies that support AI across all devices, from the cloud computing space to mobile phones,” ARM said in its shareholder letter. When this news was delivered, ARM’s stock price soared 48% on the New York Stock Exchange the next day (the 8th). Afterwards, the stock price soared by about 100% for three trading days, on the 8th, 9th, and 12th.

So far, the biggest beneficiary of AI has been Nvidia, which makes chips optimized for AI. Nvidia’s stock price soared about 49% this year, following a 240% surge last year. As of today, it ranks 5th with a market capitalization of $1.785 trillion. At one point during the day, it surpassed fourth-place Amazon.

However, ARM has recently been surging day by day, surpassing Nvidia and emerging as the biggest beneficiary of AI. In particular, NVIDIA and ARM have such a deep relationship that they once pushed for a merger. Nvidia announced in September 2020 that it planned to merge with ARM for $40 billion. However, it was ultimately aborted as ARM employees protested against it.

ARM is a British semiconductor design company founded in 1990. In 2016, Softbank, led by Chairman Masayoshi Son, acquired it for $32 billion (approximately 4 trillion won) and holds a 90% stake.

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