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Nvidia’s Shares Tank After Analyst Said $40 billion Arm Acquisition Might Not Happen

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Nvidia is one of the leading semiconductor manufacturers in the world, and it has been pursuing a deal to acquire Arm for a while now. Analysts have now weighed in on the saga as it continues to drag on.

Arm Acquisition is Highly Unlikely to go Through

Gartner semiconductor analyst Alan Priestley has revealed that it is highly unlikely for Nvidia’s deal to acquire U.K. chip designer Arm to go through. Nvidia was set to acquire Arm for $40 billion, but the deal has been in doubt for a while now.

The deal is currently facing numerous regulatory probes around the world. The analyst said there are regulatory concerns in the United States, China, the European Union and the United Kingdom. “I believe it’s highly unlikely it will go through,” Priestley told CNBC.

The deal was expected to be completed by March 2022, but Nvidia’s CEO Jansen Huang said it might be longer than that due to the current regulatory concerns. Arm is the world’s leading chip manufacturer. The company’s energy-efficient chip designs are used in 95% of the world’s smartphones and 95% of the chips designed in China.

Japan’s SoftBank bought the company in2016 for $32 billion. Arm licenses its chip designs to hundreds of companies who use them to manufacture their own semiconductors. Regulatory agencies are concerned that Nvidia acquiring Arm could restrict the company’s “neutral” semiconductor designs. It could also result in higher prices, fewer choices and lower innovation in the chip sector.

NVDA Down by Over 4%

The shares of Nvidia dipped by more than 4% after the analyst pointed out that the deal was unlikely to go through. At the close of the market yesterday, NVDA was trading at $307.06 per share.

NVDA’s technical indicators remain strong. Source: FXEMPIRE
NVDA’s technical indicators remain strong. Source: FXEMPIRE

Despite the recent dip, NVDA’s stock is bullish following its excellent performance in recent weeks. The MACD is above the neutral line, while the RSI of 57 shows that it is heading into the overbought region.

Year-to-date, NVDA’s value has gone up by more than 135%, making it one of the top performers in the semiconductor sector. The stock price could still rally higher before the end of the year as NVDA has momentum on its side.

This article was originally posted on FX Empire

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