Key takeaways
- The focus will be on Armstock on Monday after a report emerged on Sunday that the British chip designer plans to launch artificial intelligence chips in 2025.
- The company reportedly plans to set up a new AI chip unit and build a prototype by spring next year before approaching contract manufacturers to mass-produce the chips by fall 2025.
- Arm shares are currently trading within a rising wedge, with a breakdown leading to a potential test of $79, while a breakout could see the price rise to resistance around $145.
Shares of UK-based chip design giant Arm Holdings ( ARM ) will be next in focus on Monday. Nicky Asia It was reported on Sunday that the company plans to develop artificial intelligence (AI) chips, aiming to launch its first prototype as early as 2025.
According to the report, Arm — in which Japan's SoftBank ( SFTBY ) owns a 90% stake — will set up a new AI chip unit and build a prototype by spring next year before approaching contract manufacturers. So that the chips can be mass-produced by the fall of 2025.
Arm will fund the majority of initial development costs, expected to be in the billions of yen, with SoftBank also contributing, the report said. Once up and running, the AI chip business could be spun off under SoftBank.
The Japanese financial giant has already started talks with Taiwan Semiconductor Manufacturing (TSM) and other chipmakers as it seeks to ensure production capacity, Nicky Asia Reported
Arm continues to push into the lucrative data center market.
Arm, which makes money by selling royalties on its chip designs, has continued its push into the lucrative AI data center market, where the likes of Microsoft ( MSFT ), META ( META ), Alphabet ( GOOGL ), and Amazon ( AMZN The tech behemoths have it. announced plans to build its own chips in-house to meet its AI computing needs, helping reduce its reliance on AI chip supplier giant Nvidia (NVDA).
Since going public in September last year, the company's shares have more than doubled from their initial public offering (IPO) price of $51 as investors bet the chip designer will capture a larger share of the AI infrastructure market. can do. Canada's Presidency Research expects the AI chip market to grow from $30 billion this year to $200 billion by 2032.
Monitor these levels between breakouts from rising wedges.
The arm's share price has been trading within a narrow rising wedge since mid-April — a chart pattern technical analysts typically interpret as having a bearish bias because it indicates a softening of buying momentum. In the short term, the price may continue to slide until the downward sloping 50-day moving average patterns along the top trendline before the stock makes its next major move.
Amid the lower move, investors should monitor the $79 level, an area where the price could find buyers near the pre-February breakout level. However, if the price climbs above the wedge, it's worth keeping in mind that the stock could make another attempt to test key overhead resistance near price action near $145.
Arm shares closed trading last week at $108.84 after gaining 5.1% during Friday's session.
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