Telecommunications solutions provider Vodafone (NASDAQ:VOD) is teaming up with Arm Holdings (NASDAQ:ARM) to accelerate the development of new platforms for Open RAN (Radio Access Network) chipsets.
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The British company plans to use Arm Architecture to meet the rising demand for green mobile connectivity. The platform will have enough computing power to support the demand for advanced 5G services that require higher capacity.
Importantly, these software networks expand the vendor supply chain, and Vodafone aims to design the Open RAN chipsets and related ecosystems to provide smaller companies with the necessary footing to be a part of these networks.
While Fujitsu will provide the RAN software, Vodafone is also working with specialist system and silicon companies SynaXG and Ampere Computing to test and validate Arm-based Open RAN silicon. Testing to prove the compute platform is expected to begin this year, and Vodafone plans to move it to its test facilities in the first quarter of next year.
Is Arm a Good Investment?
The announcement has pushed shares of both Vodafone and Arm higher in the pre-market session today. Overall, the Street has a consensus price target of $62.32 on Arm, alongside a Moderate Buy consensus rating. This points to a nearly 15% potential upside in the stock, which has trended lower since its market debut last month.
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