Shares of leading computer graphics company NVIDIA (NVDA) soared 31.7% over the past month, on the back of a strategic collaboration with British chip technology company Arm. However, as NVDA’s agreement to acquire Arm has raised regulatory eyebrows around the world, will the company be able to hold investors’ interest in the stock? Read more to find out.Visual computing company NVIDIA Corporation (NASDAQ:NVDA) operates through Graphics and Compute & Networking segments. It offers GeForce GPUs for gaming and PCs, as well as automotive platforms for infotainment systems. The company’s expanding data center business and increasing adoption of its NVIDIA-powered laptops and computer platforms have helped the stock surge 102% over the past year. Its shares soared 31.7% over the past month, after NVDA confirmed collaboration with Arm Limited, a British chip technology company, to combine and create a new class of Arm-based PCs with NVIDIA RTX GPUs.
However, the company’s $40 billion acquisition deal of Arm is facing European and US regulatory scrutiny currently. And the deal may not be able to meet a March 2022 deadline for closing. Moreover, the ongoing supply constraints of its GPUs amid the global chip shortage could be a hindrance for the stock. While the company continues to strengthen its AI offerings, its near-term growth prospects look uncertain.
Here is what we think could influence NVDA’s performance in the near term: