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Business News/ Companies / News/  SoftBank shares climb to highest level since May 2021, thanks to Arm Holdings’ explosive AI rally
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SoftBank shares climb to highest level since May 2021, thanks to Arm Holdings’ explosive AI rally

SoftBank Group Corp. shares surged for a third day on the explosive rally of its Arm Holdings Plc., the chip designer that has almost doubled in value since making the case last week for how it will benefit from the artificial intelligence boom.

FILE PHOTO: A woman enters a SoftBank Corp branch in Tokyo May 29, 2013. REUTERS/Toru Hanai/File Photo (REUTERS/Toru Hanai/File Photo)Premium
FILE PHOTO: A woman enters a SoftBank Corp branch in Tokyo May 29, 2013. REUTERS/Toru Hanai/File Photo (REUTERS/Toru Hanai/File Photo)

SoftBank Group Corp. shares surged for a third day on the explosive rally of its Arm Holdings Plc., the chip designer that has almost doubled in value since making the case last week for how it will benefit from the artificial intelligence boom.

SoftBank’s stock climbed as much as 11% on Tuesday, to the highest level since May of 2021. SoftBank held onto a stake of about 90% in Arm as it took the company public last year.

Also Read: SoftBank sells majority stake in Paytm before regulatory scrutiny causes stock dive

Arm’s shares rose 29% on Monday, pushing its gains to more than 90% since it reported financial results on Feb. 7. The company is expanding beyond its traditional base in smartphone technology into new markets like artificial intelligence applications, lifting its outlook.

Also Read: SoftBank books $5.2 billion quarterly loss as WeWork files for bankruptcy

SoftBank founder Masayoshi Son has pledged to explore ways to use Arm’s chip designs as he pursues AI-related investments. The Tokyo-based company also reported financial results last week, logging its first profit after four quarters of losses.

Also Read: Masayoshi Son's strategic moves propel SoftBank to expected $373 billion net income

SoftBank has been trying to recover from a series of misplaced startup bets, and Son can now point to Arm as an example of his risk-taking paying off. Arm is becoming the crown jewel among his holdings, much like Chinese e-commerce pioneer Alibaba Group Holding Ltd. did in the past.

Also Read: Arm share price spikes over 30% on upbeat sales forecast; SoftBank shares jump 10%

Arm has already far surpassed SoftBank in terms of market value, even though the Japanese company holds such a large share of the company’s equity. Arm’s market valuation is now about $153 billion, while SoftBank’s is about $86 billion including Tuesday’s rally.  

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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Published: 13 Feb 2024, 06:25 AM IST
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