Shares of Arm Holdings (NASDAQ: ARM) were pulling back on the blockbuster news that Nvidia (NASDAQ: NVDA) had invested $5 billion in Intel (NASDAQ: INTC). While the deal doesn't have direct implications for Arm, Intel is Arm's biggest competitor in CPU architecture, and the deal could signal a shift in the balance of power in the chip sector, as Nvidia, which also owns a stake in Arm, is the most powerful company in the industry and the leader in artificial intelligence (AI).

As of 10:10 a.m. ET, Arm stock was down 4% after trading down as much as 7.4% earlier in the session. Intel spiked 26% on the news, while Nvidia was up 3.1%.

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Source Fool.com