Nvidia Sells Final Arm Holdings Stake, Ending a Chapter in Chip Industry Saga

Shares of Arm Holdings saw a modest premarket rise Wednesday, a day after regulatory filings revealed Nvidia has sold its remaining stake in the chip design company. The move formally closes the book on Nvidia's once-ambitious plan to acquire Arm outright.

Nvidia reported holding 1.1 million Arm shares, worth approximately $156 million, at the end of the third quarter. A filing with the Securities and Exchange Commission on Tuesday showed that position has been liquidated. Nvidia first became a shareholder during Arm's 2023 IPO, joining a strategic investor group that included Apple, Google, Samsung, and TSMC. That investment came after regulatory opposition on both sides of the Atlantic scuttled Nvidia's proposed $40 billion purchase of Arm from SoftBank in 2022.

Despite the divestment, the two companies remain deeply connected. Nvidia holds a long-term Arm architecture license, which it uses for products like its Grace data center CPUs. "We will continue to support them as a proud licensee for decades to come," Nvidia CEO Jensen Huang stated after the acquisition failed.

Arm, which powers technology for Meta, Microsoft, Amazon, and others, is currently valued near $135 billion. It recently reported strong quarterly sales of $1.24 billion, a 26% annual increase that surpassed analyst forecasts. Morgan Stanley analysts pointed to sustained investment spending as a sign Arm is preparing for long-term demand, particularly in artificial intelligence projects. The firm maintains an 'overweight' rating on the stock.

Nvidia continues to hold significant investments in other technology firms, including Coreweave, Intel, and a recently acquired $1 billion stake in Finland's Nokia.

Source: CNBC