Nvidia Corp (NASDAQ:NVDA) stock continued to remain jittery Friday after a two-day slide amid rising Treasury yields and China’s retaliatory move against Apple Inc (NASDAQ:AAPL) iPhone, including Huawei Technologies Co, Ltd’s smartphone launch triggering a selloff in the tech sector.
Broader indexes represented by SPDR S&P 500 (NYSE:SPY) and Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) lost close to 2% this week.
Meanwhile, Nvidia’s former acquisition target Arm Ltd shared ambitious forecasts driven by the demand for chips in data centers and AI.
The Softbank Group Corp (OTC: SFTBF) (OTC: SFTBY) backed chip designer projected an 11% revenue growth for the current fiscal year and over 20% growth in FY25, driven by the demand for chips in data centers and AI.
It eyes long-term operating margins of 60% as it braces for its initial public offering (IPO), with ambitions to raise $4.87 billion.
Susquehanna analyst Christopher Rolland endorsed Arm’s premium valuation almost at par with Nvidia, citing Arm’s expected compound annual revenue growth of 20% through to FY27 and improving operating margins.
He expects Arm to achieve a more diversified revenue mix, including cloud computing and higher automotive market share. The analyst sees continued opportunities for core improvements, driving up license fees and chip ASPs.
Rolland also flagged Arm’s designs come at a fraction of the cost of developing original intellectual property backed by a global community of software developers familiar with its designs.
Also, Nvidia collaborated with Indian business tycoon Mukesh Ambani’s Reliance Industries, marking Reliance Jio Infocomm and Reliance Industries’ telecom’s foray into AI.
The partnership follows Nvidia chief Jensen Huang’s meeting with the Indian Prime Minister this week, which fueled speculations of Nvidia setting up a GPU and artificial intelligence chip factory in India.
Jio Platforms boasts of a staggering user base and acquisition of the lion’s share in India’s $19 billion 5G spectrum license.
The trillion-dollar U.S. chip designer lost over 7% this week.
Price Action: NVDA shares traded lower by 1.10% at $457.34 on the last check Friday.
