SoftBank shares climb to highest level since May 2021, thanks to Arm Holdings’ explosive AI rally

SoftBank Group Corp. shares surged for a third day on the explosive rally of its Arm Holdings Plc., the chip designer that has almost doubled in value since making the case last week for how it will benefit from the artificial intelligence boom.

SoftBank’s stock climbed as much as 11% on Tuesday, to the highest level since May of 2021. SoftBank held onto a stake of about 90% in Arm as it took the company public last year.

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Arm’s shares rose 29% on Monday, pushing its gains to more than 90% since it reported financial results on Feb. 7. The company is expanding beyond its traditional base in smartphone technology into new markets like artificial intelligence applications, lifting its outlook.

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SoftBank founder Masayoshi Son has pledged to explore ways to use Arm’s chip designs as he pursues AI-related investments. The Tokyo-based company also reported financial results last week, logging its first profit after four quarters of losses.

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SoftBank has been trying to recover from a series of misplaced startup bets, and Son can now point to Arm as an example of his risk-taking paying off. Arm is becoming the crown jewel among his holdings, much like Chinese e-commerce pioneer Alibaba Group Holding Ltd. did in the past.

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Arm has already far surpassed SoftBank in terms of market value, even though the Japanese company holds such a large share of the company’s equity. Arm’s market valuation is now about $153 billion, while SoftBank’s is about $86 billion including Tuesday’s rally.