• Nvidia (NASDAQ: NVDA) shares closed marginally higher on Wednesday (01 September 2021)
• The US’ largest semiconductor firm continues to encounter challenges in its planned takeover of Arm Ltd
• The stock appears to have reached its price potential, based on the latest analyst targets
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Nvidia stock price: what’s the latest?

Nvidia shares continue to inch up this week, even though its proposed US$40 billion acquisition of British chip designer Arm Ltd has found a new opponent.

Tesla CEO Elon Musk is said to have raised competition concerns over the US semiconductor giant’s much-discussed takeover of Arm, The Telegraph reportedly last weekend.

The UK newspaper also said that e-commerce behemoth Amazon.com Inc and South Korean smartphone maker Samsung Electronics Co Ltd have lodged opposition to the deal with US authorities.

Nvidia is likely to seek European Union antitrust approval for the acquisition in early September, according to Reuters.

The stock closed slightly higher on Wednesday at US$224.4 a share, which is up 20% from its split-adjusted price of US$187.

Nvidia-Arm deal hits more roadblocks

The Nvidia-Arm deal has not been going smoothly of late.

UK regulator Competition and Markets Authority (CMA) said two weeks ago that the deal raises ‘serious competition concerns’ and could also require an in-depth investigation on national security grounds.

CMA flagged that the takeover may possibly hurt rivals by limiting their access to key technologies, cause price increases for semiconductors, and ultimately stifle innovation in a number of important and growing markets.

The chip technology sector is ‘vital’ to everyday products, said CMA chief Andrea Coscelli.

With the European Commission set to begin investigations into the proposal, Nvidia has stated it will seek to answer ‘any concerns’ regulator there might have.

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Potential US government deal with AMD fuel optimism

Nevertheless, Nvidia investors have other reasons to celebrate, as the US Department of Energy could soon ink a deal to buy a supercomputer, to be named Polaris, based on Nvidia’s A100 chips and AMD’s Rome and Milan chips.

Polaris is slated to come online this year, and will be a test machine for the department’s Argonne National Laboratory to prepare its software for a separate Intel-based Aurora machine, Reuters reported last Tuesday (24 August).

The US’ supercomputers do scientific work in areas including healthcare and climate research, as well as perform virtual testing of nuclear weapons.

Nvidia shares jumped up 2% following the report.

For now, research teams were largely positive on Nvidia’s shares, with 38 ‘buy’ calls, five ‘hold’ recommendations, and three suggesting ‘sell’. Their average 12-month target price was US$220.88, according to Bloomberg data.

Kelvin Ong | Financial writer, Singapore
02 September 2021