SoftBank shares surge to highest level since May ’21

SoftBank Group Corp. stocks surged by 11 per cent, reaching its highest level since May 2021 due to the strong performance of its Arm Holdings Plc., a chip designer that has nearly doubled in value since last week, Bloomberg reported on Tuesday.

Arm’s shares jumped 29 per cent on Monday, bringing its total gains to over 90 per cent since it reported financial results on February 7. The company is expanding beyond its traditional smartphone technology base into new markets such as artificial intelligence applications, which has boosted its outlook.

Analyst Victor Galliano noted that Arm is a high-growth stock deserving of a premium valuation, especially as an AI play, making it attractive to growth investors.

SoftBank founder Masayoshi Son has committed to exploring ways to leverage Arm’s chip designs as part of his AI-related investments. The company also reported its first profit after four quarters of losses last week.

SoftBank has been working to recover from a series of unsuccessful start-up investments, and Arm is now emerging as a successful example of its risk-taking strategy. Arm is becoming a key asset in SoftBank’s portfolio, similar to how Chinese e-commerce pioneer Alibaba Group Holding Ltd. did in the past.