Apple, Google, Nvidia and other tech giants are considering buying Arm stock

A smartphone with the logo of Arm Ltd. sits on top of a computer motherboard in this March 6, 2023, illustration.

Dice Ruvik | Reuters

This was announced by chip design firm Arm AppleParent of Google alphabet, Nvidia And other technology companies are interested in buying up to $735 million in its stock as it seeks to go public on the Nasdaq.

The investments may not happen, but the fact that these companies are considering them underscores the importance of Arm, whose designs are used for processors in data center servers, consumer devices and industrial products.

Chip Foundry Operators IntelSamsung and TSMC interested in investing in $3 trillion tech companies AMD and MediaTek, which create chip designs based on the Arm architecture. Cadence Design Systems And Synopsys, which makes electronic design automation software for processor development, has also expressed interest. Amended Prospectus Arm shares for sale. As part of the deal, Arm could end up with a $52 billion market capitalization and nearly $5 billion in new cash.

Initial public offerings in tech have been rare in the past two years, with higher interest rates making investors less willing to bet on risky high-growth companies. Arm, founded in 1990, is different. It was listed in London and New York before SoftBank bought it for $32 billion in 2016. In the second quarter, it made a profit of $105 million on revenue of $675 million.

In 2020, Nvidia announced plans to buy Arm from SoftBank for $40 billion, but regulators in the US and UK backed off. The two companies terminated the transaction in 2022, paving the way for Arm's current US IPO. Nvidia introduced its own Arm based chip which can work together with its own graphics processing units.

The fact that Nvidia couldn't buy Arm didn't stop Nvidia co-founder and CEO Jensen Huang from talking about Arm during the company's chip design. IPO Roadshow.

“Arm is an amazing company, and everyone in the world knows how much I love this company, this platform, this franchise and the world-class management team,” Huang said in his signature leather jacket during a pre-recorded roadshow video.

Nvidia is partnering with Arm on a new cloud data center ecosystem, Huang said. Historically, Intel chips have dominated data center servers.

Huang isn't Arm's only outside promoter. Rick Tsai, MediaTek's vice chairman and CEO, appeared during Arm's virtual roadshow and said that over time, more products will appear that rely on products from the two companies.

WATCHING: The portfolio manager discusses the investment risks surrounding Arm's IPO

The portfolio manager discusses the investment risks surrounding Arm's IPO