One of Nvidia’s largest investors might be looking to sell its mammoth share in the graphics card company. The giant Japanese investment firm, SoftBank, is reportedly considering offloading a $3bn stake – a part of its ‘Vision Fund’ – at the beginning of next year due to Nvidia’s dramatic share price plummet as of late. The green team has lost 49% of its value since October.
The rather rapid decline of Nvidia’s share price from lofty highs of nearly $290 to its current share price of $153 has made it a target for a potential holdings flush, says anonymous sources close to the matter. If the deal went through, Nvidia would reportedly lose its fourth largest shareholder.
SoftBank won’t be without investment in the semiconductor business if the sell-off occurs, however. Thanks to the Vision Fund, an arm of the company potentially wielding $100bn in funds, SoftBank has plenty of tech still left in its portfolio. Most notably, it currently owns 100% of ARM, mobile and SoC semiconductor extraordinaire, which it purchased for £24bn in 2016.
So far the sources, not wishing to be identified, have reported that the sale is not yet final, as Bloomberg reports. Both companies are refusing to comment on the matter. SoftBank may see the value in Nvidia yet and choose to keep its significant holding in the company.
Nvidia’s downward turn has been blamed on the sudden drop in cryptocurrency demand. Nvidia had to hedge its guidance going into Q4, below what analysts were hoping for, and even halted shipments into the channel due to an inventory overload. This all meant its recently buoyant share price plummeted over the last few months of an otherwise spectacular year.
This has led to various financial institutions hedging their bets on the green team’s AI and data centre fueled growth. Goldman Sachs said it was “clearly wrong on the stock”, meanwhile the Wall Street Journal reported it wasn’t so sure on Nvidia’s one quarter timeline to clear the inventory oversupply.
But considering Nvidia’s dominance in the gaming world and its rising importance for AI workloads, even business as usual for the green team is a highly profitable affair… whether it’s in Wall Street’s good books or not.
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