Nvidia not going ahead with Arm acquisition is 'net positive,' BofA says
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Nvidia (NASDAQ:NVDA) is reportedly not going ahead with its acquisition to purchase semiconductor licensing company Arm, a move that would be a "net positive" for the chip company, Bank of America said.
In a note to clients, analyst Vivek Arya said that the scenario would benefit Nvidia, given that the deal faces "considerable regulatory pushbacks" around the world, including in the U.S., U.K. and China.

In addition, Nvidia does not need to own Arm to use its tech to expand in the data center and Arm's smartphone sales are "highly growth dilutive" and not worth the $55 billion to $60 billion that the cash and stock value equates to.
Lastly, even if the deal is consummated, it would be a "constant" source of complicated royalty negotiations, including with Nvidia's competitors.
"All-in, we believe NVDA could redirect the cash/equity towards other growth endeavors in AI, Metaverse, gaming, autos and enterprise AI," Arya wrote in a note to clients.
Nvidia (NVDA) shares are up more than 3% to $230.40 in pre-market trading.
Arya continues to rate Nvidia shares buy, adding that the company's "unique and highly leverageable accelerated computing platform is best-positioned in the industry to take address several of the most, important, multi-decade secular growth opportunities."
On Tuesday, an Nvidia spokesperson told Seeking Alpha: "We continue to hold the views expressed in detail in our latest regulatory filings -- that this transaction provides an opportunity to accelerate Arm and boost competition and innovation."
Softbank (OTCPK:SFTBY), which owns Arm, has not yet responded to requests for comment.
Instead of selling Arm to Nvidia, SoftBank is reportedly prepping Arm to go public. SoftBank bought Arm for $31 billion in 2016.
Earlier this month, Nvidia discussed the benefits of the Arm deal in a filing with the Securities and Exchange Commission, saying it was originally approached by Arm owner, SoftBank, about a possible deal. Nvidia (NVDA) also said the proposed tie-up "represents a unique, once-in-a-generation opportunity to expand and enhance Arm ecosystem in critical markets."