SOFTBANK GRP UNSP/ADR

Intel’s INTC revival as a leading chipmaker has gained traction following Tuesday’s announcement that SoftBank SFTBY had taken a nearly 2% stake in the company worth $2 billion.
Furthermore, the Trump administration is reportedly considering a 10% stake in Intel, which could make the U.S. goverment the company’s largest shareholder in a broader effort to strengthen domestic chipmaking capabilities.
To do so, the government would convert funds that Intel received through the CHIPS Act grants into equity, with Intel receiving roughly $11 billion in grants for commercial and military chip production.
With SoftBank helping to lead the large stake investments in Intel, investors may be starting to believe that the chip giant’s revival is ahead. As one of the market’s top performers this month, Intel shares have surged +18% in August, to largely outpace the broader indexes, with Nvidia NVDA and other AI infrastructure-related stocks starting to lose some of their blazing steam.
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SoftBank’s Strategic Investment in Intel
Known for its bold bets on tech and innovation, it’s noteworthy that Intel CEO Lip-Bu Tan has deep ties with SoftBank after previously serving on the multinational holding company's board of directors from 2020-2022.
Intel and SoftBank also have collaboration efforts in Saimemory, a startup focused on stacked DRAM (Dynamic Random-Access Memory) chips for AI applications.
Seeing Intel as a critical player in expanding AI chip production, SoftBank is heavily invested in artificial intelligence, having a $500 billion data center project, deemed “Stargate” with OpenAI and Oracle ORCL.
This strategic move also positions SoftBank as a key influencer in global chip supply chains, becoming one of Intel’s largest shareholders and deepening its semiconductor portfolio as the majority owner of ARM Holdings ARM while holding stakes in Nvidia and Taiwan Semiconductor TSM as well.
Why SoftBank’s Lifeline to Intel is So Important
With SoftBank’s investment providing a financial lifeline, this will allow Intel financial flexibility to stabilize its operations after posting a $18.8 billion loss in 2024, the chipmaker's first unprofitable year since 1986. Attributing to last year’s loss, Intel’s foundry division has struggled to secure major clients after losing Nvidia as a customer to Taiwan Semiconductor.
Without these large-scale customers or further outside investments, Intel may have to cancel or halt its mega semiconductor factory in Ohio (Ohio One). Notably, Ohio One is one of the most ambitious tech infrastructure projects in U.S. history, which is another reason the Trump administration has planned to assist Intel, seeing the mega-factory as a way to reduce the nation's reliance on foreign chipmakers.
Tracking Intel’s Outlook & Balance Sheet
Showing signs that its revival may be ahead, Intel’s annual earnings are expected to swing back into the black in fiscal 2025 to $0.15 per share, compared to an adjusted loss of -$0.13 a share last year. Reassuringly, Intel’s FY26 EPS is projected to rebound to $0.68.
On the top line, Intel’s total sales are currently slated to dip over 1% this year, but are projected to rebound and rise 4% in FY26 to $54.2 billion. However, FY26 sales projections would still be well away from Intel’s multi-year peaks of $79 billion in 2021.
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Regarding Intel’s financial health, the company has a solid balance sheet, having $192.52 billion in total assets at the end of Q2 compared to $86.76 billion in total liabilities. Plus, Intel has over $21 billion in cash & equivalents as shown in the quarterly chart below.
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Monitoring Intel’s P/S Valuation
The price-to-sales ratio (P/S) may be a better way to track Intel's value to investors at the moment rather than the P/E ratio. In this regard, INTC does trade near the preferred level of less than 2X forward sales, with the S&P 500 at 5.5X, and many chip peers such as Nvidia and Taiwan Semiconductor still trading at hefty premiums to these levels.
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Bottom Line
SoftBank’s investment in Intel certainly signals confidence in the chip giant’s turnaround and future relevance. That said, after such a sharp rally this month, Intel stock lands a Zacks Rank #3 (Hold), although investors are starting to get more reassurance for what is hopefully a continued rebound at some point.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Intel's Revival Ahead After SoftBank's $2 Billion Investment

Market News
U.S. stocks ended higher on Wednesday after President Trump announced a $500 billion investment in AI infrastructure. Market participants also reacted positively to strong fourth-quarter results. The Nasdaq Composite, the Dow Jones, and the S&P 500 ended the day in the green zone.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.3% or 130.92 points to close at 44,156.73. Within the 30-stock index, 13 components ended in positive territory, while 17 ended in the negative zone.
The tech-heavy Nasdaq Composite advanced 252.56 points or 1.3% to 20,009.34.
The S&P 500 gained 0.6%, or 37.13 points, to end at 6,086.37. Two of the 11 sectors of the benchmark index ended in positive territory. The Technology Select Sector SPDR (XLK) gained 2.3%, while the Utilities Select Sector SPDR (XLU) fell 2.2%.
The fear-gauge CBOE Volatility Index (VIX) increased 0.3% to 15.10. A total of 13.89 billion shares were traded on Wednesday, lower than the last 20-session average of 15.33 billion. The S&P 500 posted 39 new 52-week highs and four new lows. The Nasdaq Composite recorded 104 new highs and 95 new lows.
Trump Announced $500 Billion Investment in AI Infrastructure
On Jan. 21, 2025, U.S. President Donald Trump unveiled a private sector investment of $500 billion to develop the nation’s AI infrastructure. An initiative led by OpenAI, SoftBank Group Corp. SFTBY, and Oracle Corporation ORCL includes the construction of data centers and the creation of over 100,000 jobs. The companies have agreed to $100 billion upfront and more funding to follow over four years. The data centers, already under construction in Texas, aim to power AI innovations like healthcare applications. Therefore, news of the partnership prompted shares of Oracle and SoftBank to rise 6.8% and 11.4%, respectively on Jan. 22, 2025.
Solid Q4 Earnings Results
The Travelers Companies, Inc. TRV reported fourth-quarter 2024 adjusted earnings of $9.15 per share, which surpassed the Zacks Consensus Estimate of $6.5. Revenues of $12.06 billion beat the Zacks Consensus Estimate by 1.01%.
Netflix, Inc. NFLX reported fourth-quarter 2024 adjusted earnings of $4.27 per share, beating the Zacks Consensus Estimate of $4.20. Revenues of $10.25 billion beat the Zacks Consensus Estimate by 1.29%.
Capital One Financial Corporation COF reported fourth-quarter 2024 adjusted earnings of $3.09 per share, beating the Zacks Consensus Estimate of $2.66. Revenues of $10.19 billion beat the Zacks Consensus Estimate by 0.32%.
Consequently, shares of The Travelers Companies, Netflix and Capital One Financial Corporation rose 3.2%, 9.7% and 4%, respectively. Each of the three companies carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Stock Market News for Jan 23, 2025

The artificial intelligence (AI) rally just keeps getting bigger. The latest stock to get caught up in the AI mania is Arm Holdings PLC (ARM), which listed on the Nasdaq in September.
On Feb. 8, ARM shares surged 47.8% after AI spending boosted the chip designer’s forecast. CEO Rene Haas said the opportunity presented by AI is still in its early stages, telling Bloomberg TV, “AI is not in any way, shape or form a hype cycle. We believe that AI is the most profound opportunity in our lifetimes, and we’re only at the beginning.”
Notably, his remarks pretty much echoed what Nvidia (NVDA) said after the blowout quarter it reported after the close last night.
In its blockbuster earnings report, Arm projected revenue of $850 million to $900 million for the March quarter, which far exceeded analysts’ forecasts of $778 million. Adjusted earnings per share were projected to be roughly 30 cents, well ahead of Wall Street’s 21-cent estimate. Arm also raised its sales forecast for fiscal 2024 to a range between $3.16 billion and $3.21 billion.
For those of you unfamiliar with Arm, it is 90%-owned by Japan’s Softbank Group (SFTBY). Its technology is going into an ever-widening array of products, from smartphones to cars to appliances.
The company sells chip design licenses to manufacturers for the fundamental set of instructions that software uses to communicate with chips. These companies, in turn, pay royalties to Arm on each unit shipped. Its unique role in the semiconductor industry also involves providing so-called design blocks that companies such as Qualcomm (QCOM), Amazon (AMZN), and Apple (AAPL) use to build their processors.
The key characteristic of Arm’s chip designs is that they use less energy per unit of performance than their rivals, which has helped them to become the industry standard for mobile processors - where Arm's market share is 99%. Power efficiency has also helped the company take significant share in data center chips, where energy use is an increasingly important consideration.
Arm and AI
Arm does have major tailwinds at its back, as its customers shift to a new version of its technology called V9, which carries twice the royalty rate of its predecessors. And they’re using more Arm computing cores per device — over 100 in Microsoft’s (MSFT) new server chips, for example — which boosts royalties. Arm is also gaining market share from rival technology in the aforementioned data centers market, as well as the automotive market.
Nvidia’s Grace Hopper, Microsoft’s Cobalt and Amazon’s Graviton - used to run large language models - are all based on Arm’s newest V9 chip design. The V9 now makes up 15% of the company’s overall royalty revenues, up from 10% during the last quarter. I expect this number to continue expanding quite rapidly as Arm’s management continues to move its business away from the smartphone market, which is showing little growth, and toward AI-related sectors.
The recently mauled Arm bears would argue that Arm is mainly a CPU (central processing unit) company, while AI computing is driven primarily by GPUs (graphics processing units), which are Nvidia's bread and butter.
They have a point, but they are misreading the story. Arm is a data center story. Yes, the core AI jobs will be done by GPUs. But there are lots of ancillary computing tasks that need to be done, such as serving web pages, gathering data, and formatting it for AI.
So, Arm is part of the AI story. If you look at the overall computing infrastructure, there is going to be a lot of change, with data centers being rebuilt. Arm will be a major player in that rebuild, which is perhaps why Nvidia itself recently disclosed an investment worth $147.3 million in the company it once tried to acquire.
Why Buy Arm Stock?
There are several reasons to buy Arm stock.
First, the company has a huge amount of room to increase the royalty rates it charges customers that use its chip designs, especially now that its designs are becoming an integral part of the new data center/AI computing infrastructure. Keep in mind that it only charges phone makers $0.50 per phone sold for its mobile CPU designs.
And even if we ignore Arm’s improving fundamentals, there is another reason its stock could be in store for more fireworks after the massive post-earnings rally. SoftBank sold less than 10% of Arm during the IPO, holding on to most of its shares so that it would be able to borrow money against the stock. This will obviously restrict the supply of stock out there over the longer term, which should help increase the stock’s value.
I also believe Arm will keep gaining market share in the cloud computing and automotive sectors. Energy consumption is one of data center’s main expenses, so energy efficiency is paramount. In automotive, the transition to electric vehicles (EVs) creates demand for more efficient chips, as well.
Arm chips will continue to see growth from AI, as they are used in conjunction with GPUs in data centers and to enable on-device AI features in smartphones.
And Arm is in a financially healthy position, with $1.6 billion of cash on hand and no debt.
Buy Arm stock under $150 a share.
On the date of publication, Tony Daltorio did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Why Arm Holdings Is the Next Must-Have AI Stock

Shares of Softbank (SFTBY)-backed Arm Holdings (NASDAQ:ARM) made a stellar stock market debut on September 14, rallying 25% on the first trading day. However, the chip design company’s stock quickly shed those gains and currently trades at $52.51, which is below the closing stock price of $63.59 on September 14. Wall Street analysts are cautious about the stock due to several concerns, including its high valuation and exposure to China.
Wall Street is Sidelined on ARM Stock
Arm does not manufacture chips but licenses its architecture to other chipmakers and original equipment manufacturers (OEMs). The company claims that its central processing units (CPUs) have enabled advanced computing in over 99% of smartphones worldwide. Arm’s technology also powers operating systems and applications for mobiles, personal computers, tablets, data centers, networking equipment, and vehicles, among other things.
However, Arm faces competition from the open-source RISC-V chip architecture, which gaining traction, with many of Arm’s customers also showing interest in it. The company also faces competition from the advanced x86 architecture developed by chip giants Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC). While ARM leads the smartphone end market, these rival technologies have a strong hold over the laptop and data center end markets.
Other risks to be noted include the company’s exposure to China amid the growing U.S.-China tensions and weakness in top-line growth due to a dull smartphone market. Another risk is revenue concentration, with the company’s top five customers (including Arm China) accounting for about 57% of the overall revenue in the fiscal year ended March 31, 2023.
On September 22, Susquehanna analyst Mehdi Hosseini initiated coverage of Arm Holdings stock with a Hold rating and a price target of $48. The analyst thinks that stock has a fairly valued risk/reward. He also pointed out the weakness in the mobile market, the company’s largest end market. Additionally, the microcontroller market, Arm’s second largest end-market, has started to reach market share saturation.
The analyst is concerned that if Arm tries to achieve further growth in these areas by forcing a higher royalty rate, it might incentivize customers to explore alternatives.
Meanwhile, on September 25, Bernstein analyst Sara Russo reiterated a Sell rating on ARM stock with a price target of $46. While the analyst likes the company’s fundamentals and its dominant position in mobile, she feels that the company is not immune to the sluggish smartphone market. The analyst believes that it will take time to see improvements in mobile royalty rates.
Russo said that her estimates for mobile royalty rates in FY27 and consequently revenue growth expectations remain below management’s estimates.
Is Arm Holdings a Good Stock to Buy?
Currently, Wall Street has a Hold consensus rating on Arm Holdings stock based on one Buy, three Holds, and one Sell rating. The average price target of $50.75 implies a possible downside of 3.4%.
Conclusion
Arm Holdings expects its total addressable market to grow at a 6.8% compound annual growth rate to about $246.6 billion by 2025, driven by prospects in lucrative areas like artificial intelligence and cloud computing. However, Wall Street feels that the positives are already baked into the stock and does not see any upside due to the risks discussed above.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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