Blogs -Making Sense of The Nvidia-Arm Acquisition

Making Sense of The Nvidia-Arm Acquisition


March 16, 2021

author

Beth Kindig

Lead Tech Analyst

Last week, I wrote about the Nvidia-Arm acquisition, the politics involved as well as its chances of success. Nvidia announced last September that it reached a deal with Softbank to acquire U.K. based semiconductor and software design company Arm Ltd. for $40 billion, making it one of the biggest acquisitions in tech.

Behemoths like Google and Microsoft are opposed to the deal, which requires approval from authorities in at least four governments, including the U.S., U.K., E.U., and China. Qualcomm is fighting the acquisition, as the company relies heavily on Arm for microprocessor intellectual property (IP).

For reference, the name Arm stands for “Acorn RISC Machine” and comes from founders Sophie Wilson and Steve Furber discovering that a CPU can run faster on a small set of instructions. The discovery these two made in the early 1980s was to let the operating system break down tasks rather than add more instructions to the processor. While most CPU designs were adding more instructions to chips, Arm patented the technique of using fewer instructions that run more quickly and efficiently. Due to power constraints of the mobile device, which was introduced much later, Arm found a massive market where it dominates at 90%.

The company works quietly in the background with 22 billion chips shipped globally in 2019 and a cumulative total of 166 billion chips in 2019. The company hit 180 billion chips as of the press release on the acquisition.

Revenue is generated from licenses for Arm’s technology and royalties that come from the subsequent sale of the licensees’ chips that contain Arm’s technology. To compare, Nvidia announced it had shipped 1 billion processors in 2011 and there has not been an update for the 2 billion mark yet, with estimates of Nvidia’s shipments hitting around 100 million chips per year.

Arm is most dominant in mobile with 90% market share in mobile processors, and dominates in-vehicle infotainment and advanced-driver assistance system (ADAS) processor market at 75%. The overall share of Arm’s related markets is 34%.

Arm-based technology is found in electronic devices and PCs, including Microsoft’s Arm-based Surface and Apple’s custom CPUs for Macs. The majority of tablets and digital TVs also use Arm’s architecture.

In fact, Arm offers the most popular CPU architecture in the world. The company’s dominant market share is achieved through its developer ecosystem, which fits neatly into one of our primary theses for Nvidia, its GPU-powered cloud and developer ecosystem.

Arm will bring an estimated 15 million software programmers to Nvidia. In Nvidia’s recent earnings report, the company announced it had doubled from 1 million to 2 million developers – so Arm increases Nvidia’s reach by 7X.

Read the Full Article Here

Gains of up to 403% from our Free Newsletter.

Here are sample stock gains from the I/O Fund’s newsletter --- produced weekly and all for free!

+344% on Nvidia

+403% on Bitcoin

+218% on Roku

*as of March 15, 2022

Our newsletter provides an edge in the world’s most valuable industry – technology. Due to the enormous gains from this particular industry, we think it’s essential that every stock investor have a credible source who specializes in tech. Subscribe for Free Weekly Analysis on the Best Tech Stocks.

If you are a more serious investor, we have a premium service that offers lower entries and real-time trade alerts. Sample returns on the premium site include 324% on Zoom, 601% on Nvidia, 445% on Bitcoin, and 4-digits on an alt-coin. The I/O Fund is audited annually to prove it’s one of the best performing Funds on the market with returns that beat Wall Street funds. 

beth

More To Explore

Newsletter

Investing In AI with Beth Kindig: 1-Hour Video Interview

Investing In AI with Beth Kindig: 1-Hour Video Interview

Jordi Visser, CIO and Chairman of Weiss Multi-Strategy Advisers, spoke to Beth Kindig on the Real Vision podcast on March 20th, to dive deep into AI’s potential for explosive economic growth, how to f

April 19, 2024
https://images.prismic.io/bethtechnology/Zh50DEaI3ufuUONy_SemiconductorStocksQ4OverviewAIGainsHeatUp.jpg?auto=format,compress

Semiconductor Stocks Q4 Overview: AI Gains Heat Up

Semiconductor stocks are standout performers so far in 2024, with investor appetite for AI stocks remaining elevated as AI chip leader Nvidia continues its streak of high growth.

April 15, 2024
I/O Fund Catapults to 131% Cumulative Performance Due to Leading AI Allocation

I/O Fund Catapults to 131% Cumulative Performance Due to Leading AI Allocation: Official Press Release

I/O Fund, a tech research site that actively manages a real-time portfolio, announces returns of 57% in 2023 with a cumulative return of 131% since inception. This compares to popular tech ETFs that h

April 03, 2024
The Importance of Verified Returns and Risk Management for Retail Investors

The Importance of Verified Returns and Risk Management for Retail Investors

Last year was a stellar year for investors – in 2023, the Nasdaq 100 rose 54% for its best annual return since 1999, while the S&P 500 gained 24%. The Magnificent 7 were the de facto leaders of this m

March 27, 2024
ARM Building

Arm Stock: AI Chip Favorite Is Overpriced

Arm Holdings is positioned to capitalize on the growing adoption of artificial intelligence (AI) technologies, leveraging its established licensing model and extensive ecosystem to drive future growth

March 26, 2024
Meta Building Picture

Top 3 Ad-Tech Stocks For 2024

Ad spending growth is widely forecast to accelerate in 2024, after a challenging macro environment significantly dented budgets and growth in 2023. The US advertising market is already showing positiv

March 18, 2024
Cybersecurity Apps

Cybersecurity Stocks: CrowdStrike Soars While Palo Alto And Zscaler Fall

This year has led to a split landscape for cybersecurity stocks, with two of cybersecurity leaders up more than 20% YTD while others are negative YTD. In the past, we’ve discussed the resiliency of th

March 10, 2024
The Magnificent 7 Are Falling Like Dominos; Only 3 Remain

The Magnificent 7 Are Falling Like Dominos; Only 3 Remain

The Magnificent 7 of 2023 have now become 2024’s Magnificent 3: Nvidia, Meta and Amazon. Of these, Nvidia’s saw a stellar start to the year as shares have gained nearly 60% YTD due to the GPU leader’s

March 05, 2024
Nvidia Stock Gained $1.5 Trillion To Surpass The FAANGs - Apple Is Next

Nvidia Stock Gained $1.5 Trillion To Surpass The FAANGs - Apple Is Next

Today, Nvidia surpassed a $2 trillion market cap compared to Apple’s $2.8 trillion. The company has surpassed Amazon, Google, Tesla, Meta and Netflix. The only one left standing is Apple and we have 2

February 28, 2024
https://images.prismic.io/bethtechnology/93644c8f-e9e6-4b61-944f-d7ebc957628a_Palantir+Stock+Surges+From+Artificial+Intelligence+Platform.jpg?auto=compress,format

Palantir Stock Surges From Artificial Intelligence Platform

Palantir’s Q4 earnings confirmed an acceleration in its US commercial business as it closed out its first GAAP profitable year. Shares are reflecting the optimism surrounding Palantir’s commercial seg

February 20, 2024
newsletter

Sign up for Analysis on
the Best Tech Stocks

https://bethtechnology.cdn.prismic.io/bethtechnology/e0a8f1ff-95b9-432c-a819-369b491ce051_Logo_Final_Transparent_IOFUND.svg
The I/O Fund specializes in tech growth stocks and offers in-depth research for Premium Members. Investors get access to a transparent portfolio, a forum, webinars, and real-time trade notifications. Sign up for Premium.

We are on social networks


Copyright © 2010 - 2024
Get Free Weekly Analysis on the Best Tech Stocks