Arm Stock Jumps on Reported Deal to Sell Chips to Meta

Key Takeaways

Arm Holdings (

ARM

) shares surged Thursday following a report
the chip designer
is developing its own chips, with tech giant Meta Platforms (

META

) set to be one of its first customers.

Arm is expected to showcase the new chip as early as this summer, as part of a broader strategy shift for the company, the

Financial Times

reported Thursday. Arm is majority owned by
Japanese firm SoftBank
, and designs and licenses its technology to other chipmakers and tech companies like Nvidia (

NVDA

) and
Apple
(

AAPL

).

The chip is expected to be used in servers and data centers, with custom options for customers like Meta. The chip’s manufacturing will likely be outsourced to another company like TSMC (

TSM

), according to the

Financial Times

.

SoftBank is also reportedly close to acquiring another chip design firm, Ampere, as part of the firm’s push into the AI space, along with the
$500 billion Stargate joint venture
announced last month, which
Arm is also a partner
in.

Arm declined to remark on the report, while Meta and SoftBank did not immediately respond to requests for comment.

Arm shares rose more than 6% Thursday to $164.83 following the news. With Thursday’s gains, the chip designer’s stock has added more than a fifth of its value of the past 12 months.

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