SoftBank a likely beneficiary of Arm-Nvidia links, says Jefferies

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The analysts told investors that the company is a likely beneficiary of the ARM-NVDA links, and the risk-reward has flipped to favorable.

“Earlier, we expressed a view that SBG stock will rally ahead of the ARM IPO later in the year,” said the analysts. “But given market’s fascination for semi-stocks, we think it makes sense to move early.”

“As NVDA’s rev guidance ($11b) exceeded expectations ($7.2b), been a tailwind for all semi-related stocks. However, SBG stock is up only 1.4% YTD vs NVDA +160% and SOXX +37%.”

While Jefferies acknowledged that only a couple of days ago, they wrote that Softbank rallying ahead of the Arm IPO was too soon, but they now “cannot ignore the fact (yes, the facts have changed) that the NVDA results+ guidance update (next Q guide of $11b, vs. $7.2b expected) on the back of demand for GPUs for AI, has driven almost all semi-related stocks higher.”