Japanese tech investment giant Softbank Group (SFTBF) and its majority-owned chip designing business Arm Holdings (ARM) are exploring the possibility of acquiring semiconductor firm Ampere Computing. Talks are in very initial stages, with no guarantee that a deal would go through. The ongoing AI wave has bolstered the attractiveness of semiconductor and processor manufacturers. Notably, Softbank specializes in investing in technology companies and its investments have grown multifold currently.
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Here’s More on a Potential Arm Holdings-Ampere Deal
Ampere Computing is backed by the U.S. tech giant Oracle (ORCL), which has invested millions of dollars in the start-up since its inception. Reports suggest that Oracle currently has a roughly 30% stake in Ampere and also has the option to buy it. Interestingly, Ampere has been considering strategic alternatives for its business, including a sale, and has roped in a financial advisor to help with the same. Ampere has caught the interest of Arm, and rightly so, since the two share a long-standing business relationship.
Ampere uses UK-based Arm’s technology to design semiconductors and CPUs (central processing units). It is focused on developing high-performance, energy-efficient chips that are being used by the likes of Oracle and Alphabet’s (GOOGL) Google among others.
Ampere’s earlier attempts to file an IPO (initial public offering) seem to have fallen apart, which is why the semiconductor player could be fielding takeover interests from bigger players. Notably, the deal value remains unknown since discussions are private. Back in 2021, Ampere was valued at $8 billion, according to a Bloomberg report.
Is Arm Holdings a Good Buy?
Analysts remain divided on Arm Holdings stock. On TipRanks, ARM stock has a Moderate Buy consensus rating based on 14 Buys, four Holds, and one Sell rating. Also, the average Arm Holdings PLC price target of $154.60 implies 6.5% upside potential from current levels. In the past year, ARM shares have gained 102%, thanks to the AI (artificial intelligence) boom.
Is Softbank a Buy?
Analysts are also split on Softbank Group stock. On TipRanks, SFTBF stock has a Moderate Buy consensus rating based on four Buys and two Hold ratings. The average Softbank Group price target of $78.45 implies 28.1% upside potential from current levels. The Masayoshi Son-backed investment conglomerate has seen its shares gain 41.5% in the past year.
