### Summary
Investors are waiting for Arm's Nasdaq IPO filing to determine if the chip designer will experience "exponential growth" due to the AI boom, as CEO Masayoshi Son claims.
### Facts
- 📈 SoftBank, the owner of Arm, has positioned the chip designer as a key asset for the conglomerate's AI-related companies.
- 💰 SoftBank valued Arm at $64 billion, but analysts value it around $47 billion.
- 💻 Arm does not sit at the center of the AI boom but is more AI-adjacent.
- 💡 Arm specializes in energy-efficient central processing units (CPUs) that can complement Nvidia's advanced semiconductors.
- 🌐 Arm's opportunity lies in providing intellectual property for AI and machine learning in devices used by end users.
- ❓ Analysts question whether 85% of SoftBank's portfolio companies can truly be described as AI-related.
Arm Holdings is aiming to become the next big chip stock and is preparing for its public listing, while focusing on establishing itself as a leader in the artificial intelligence sector.
Retail investors should be cautious when buying shares of Arm Holdings' upcoming IPO, as recent data shows that individual investors tend to lose money on blockbuster IPOs, with the 10 biggest US IPOs in the past four years down an average of 47% from their first-day closing price.
Arm, the chip designer owned by SoftBank Group Corp, is set to secure at least the top end of the price range in its IPO, valuing the company at $54.5 billion, after receiving strong investor backing, with the shares scheduled to start trading in New York on Thursday.
Danish drugmaker Novo Nordisk's shares fell after a split aimed at increasing liquidity, but analysts remain optimistic about the company's leadership in the obesity drug market.
U.S. stocks dropped as enthusiasm for Arm's IPO faded and the United Auto Workers initiated a strike against Detroit's Big Three automakers, with the Nasdaq falling 1.6% and the S&P 500 losing 1.2%.
Shares of Alphabet Inc. Cl A fell 0.51% as the stock market experienced a dismal trading session, although it outperformed some of its competitors.
Arm Holdings shares are dropping after a successful IPO, and there are concerns that the stock could fall further.
Bernstein has given its first-ever sell rating to Arm Holdings, stating that the stock may plummet due to competition, a saturated phone market, and risks associated with China and AI hype.
Shares of chip designer Arm Holdings fell 4% after an analyst expressed concerns about the company's future and emphasized the need for stronger earnings in Fiscal Year 2023, assigning a Hold rating on the stock with a price target of $50 per share.
Intel's stock drops as analysts express skepticism about the company's ability to compete with Nvidia in artificial intelligence.
Arm Holdings' stock had a strong IPO, but recent sell-offs and high valuations have raised concerns about its future performance, leading to a "Sell" rating and a price target of $46 per share from Bernstein analyst Sara Russo. While Arm is a frontrunner in the semiconductor industry and has value in its architecture, investors should temper their expectations, as its exposure to AI is limited compared to companies like Nvidia. Analyst ratings on ARM stock range from "Buy" to "Sell," with an average price target of $51.67, implying a potential downside of 2.3%.
ARM Holdings' lackluster performance following its IPO debut raises questions about the company and the IPO market, as investors may be rotating out of high-risk assets and dampening the prospects for new listings.
