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.
Arm, the British chip designer, has published a prospectus for its IPO on the Nasdaq exchange next month, with an expected valuation of $60bn to $70bn, attracting interest from tech giants such as Amazon, Apple, and Nvidia.
Arm Holdings Ltd, owned by SoftBank Group Corp, is planning to launch its roadshow for investors after Labor Day and set a price range for its much-anticipated IPO in September, with SoftBank selling about 10% of Arm's shares at a valuation of $60 billion to $70 billion.
Leading technology companies, including Apple, Nvidia, and Alphabet, have agreed to invest in Arm Holdings' initial public offering, which is targeting a valuation between $50 billion and $55 billion, according to sources.
Arm Holdings, owned by Softbank, has received investor demand that is six times the amount it is seeking in its $5 billion stock market debut, making it more likely to reach its targeted price range of $47 to $51 per share.
Arm Holdings has priced its initial public offering at $51 per share, at the top end of the expected range, giving the chip design company a valuation of $54.5 billion.
Dow Jones futures rose slightly, along with S&P 500 futures and Nasdaq futures, despite mixed performance in the stock market rally following the release of the CPI inflation report; Arm Holdings priced its IPO at $51 per share, giving it an initial valuation of over $54 billion; and attention turns to Adobe's earnings and the looming UAW strike for Ford, GM, and Stellantis.
SoftBank's chip designer Arm Holdings is set to debut on the Nasdaq with a valuation of $54.5 billion, marking a potential test for IPOs in the United States after a lengthy drought.
UK-based chip designer Arm made its Nasdaq debut with the largest IPO since 2021, trading at $56 per share, bringing the company's market cap to nearly $60 billion, and opening the door for a wave of new IPOs.
Arm shares surged 25% on its first day of trading on Nasdaq, boosting US stocks, while the European Central Bank's rate decision also contributed to positive market sentiment.
Arm stock is experiencing a second day of gains and is currently more popular than Apple.
Arm stock is now trading in rare territory, but the company needs to prioritize AI development in order to maintain its growth.
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%.
