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Arm Stock in Focus After Reportedly Planning to Launch AI Chips
ARMArm plc(ARM) Investopedia·2024-05-13 02:05

Company Strategy and Market Focus - Arm plans to launch artificial intelligence chips in 2025, establishing a new AI chip unit and building a prototype by spring 2024, with mass production expected by fall 2025 [1][2] - The company is pushing into the lucrative AI datacenter market, targeting tech giants like Microsoft, Meta, Alphabet, and Amazon, which are developing in-house AI chips to reduce reliance on Nvidia [3] - Arm's shares have more than doubled since its IPO in September 2023, reflecting investor confidence in its potential to capture a significant share of the AI infrastructure market [3] Financial and Development Details - Arm will fund the majority of the initial development costs, expected to be billions of yen, with SoftBank also contributing [2] - The AI chip business could potentially be spun off under SoftBank once operational [2] - SoftBank has initiated negotiations with Taiwan Semiconductor Manufacturing (TSM) and other chipmakers to secure production capacity [2] Market and Share Performance - The AI chip market is projected to grow from $30 billion in 2023 to $200 billion by 2032, according to Precedence Research [3] - Arm's share price has been trading within a rising wedge since mid-April, with potential support at $79 and resistance near $145 [4] - Arm shares closed at $108.84 last week, gaining 5.1% during Friday's session [4]