Arm IPO: Should Investors Buy Into the Hype?


Undoubtedly one of this week’s biggest developments, chip designer Arm Holdings ARM debuted on the Nasdaq on Thursday. Shares had a strong showing, soaring more than 20% in yesterday’s session, listed initially at $51 per share.

It’s an exciting time for investors, especially following a barren 2022 landscape for IPOs. SoftBank, the controller of Arm Holdings (90% stake), took the company private back in 2016. But given the hype, what is there to know about the company? Let’s take a closer look.

Arm Holdings Overview

Arm Holdings constructs, develops, and licenses high-performance, low-cost, energy-efficient IP solutions for CPUs, GPUs, NPUs, and other interconnected technologies.

The company’s product portfolio is relied upon among many high-profile semiconductor companies and other original equipment manufacturers (OEMs). Breaking down the business in simpler terms, Arm licenses instruction sets for modern chips to partners who utilize it for their preferred applications.

Tech Heavyweights Are Interested

Many technology heavyweights, a list that includes Advanced Micro Devices AMD, Apple AAPL, Alphabet GOOGL, and NVIDIA NVDA, all expressed interest in ARM shares, further stating the excitement surrounding the IPO.

These heavyweights have led the market’s rebound in 2023, as we can see below.

Image Source: Zacks Investment Research

Just in early September, Arm unveiled it struck a new long-term agreement with Apple extending beyond 2040, continuing an already long-standing relationship. Apple has and continues to use Arm architecture extensively within the iPhone, iPad, and Macs.

And in a recent SEC filing, Arm Holdings revealed that more than 260 companies reported shipping Arm-based chips in the fiscal year ended March 31st, 2023, a list that includes NVIDIA, Advanced Micro Devices, and Qualcomm QCOM.

We’re all familiar with the AI hype surrounding NVIDIA in 2023, causing shares to soar. Interestingly, Arm Holdings is already working with NVIDIA to deploy technology to run AI workloads. Arm’s CPUs presently run AI and ML (machine learning) workloads in billions of devices.

Analysts have become notably bullish on NVDA’s outlook amid the artificial intelligence hype, helping land it into the highly-coveted Zacks Rank #1 (Strong Buy). As we can see below, the revisions trends have been potent across all timeframes, and analysts have been in full agreement.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

With all of the attention surrounding Arm Holdings’ ARM IPO, it’s worthwhile to take a quick look under the hood of the company to understand the hype better.

And it’s easier to understand the excitement when seeing which companies have also shown interest, a list that includes the likes of many investor-favorite technology heavyweights.

It’s more than reasonable to assume the excitement surrounding shares will last some time, especially following Wall Street’s obsession with its new shiny toy, artificial intelligence.

Zacks Names #1 Semiconductor Stock

It’s only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.

With strong earnings growth and an expanding customer base, it’s positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.

See This Stock Now for Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report

Apple Inc. (AAPL) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

ARM Holdings PLC (ARM): Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Source link

Visited 1 times, 1 visit(s) today

Related Article

Rate cut bets boost stocks as bitcoin breaks $100,000 By Reuters

By Tom Westbrook SINGAPORE (Reuters) -Bitcoin broke $100,000 on Thursday as investors bet on a friendly regulatory shift in the U.S., while Asian stocks were firm after Wall Street indexes notched record highs on growing confidence in U.S. interest rate cuts. hit the $100,000 mark in the Asia morning and was last at $101,300. “At

Experts says martial declaration was a blunder by South Korean president

South Korean President Yoon Suk Yeol’s surprising short-lived move to declare martial law, which drew condemnation from opposition lawmakers, to root out “anti-state” forces was a “blunder” and possibly an attempt to “reassert himself,” an expert says.  Opposition parties moved Wednesday to impeach the president, which would require the support of two-thirds of the 300-seat

3 Breakout Growth Stocks You Can Buy and Hold for the Next Decade

The year is drawing to a close, and what a year it has been for the stock market. As of this writing, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are up 26%, 28%, and 19%, respectively. That said, there are many growth stocks that have far outpaced the benchmark indexes and could

How a Trump Trade War Could Play Out for the Stock Market

Donald Trump’s proposal to impose tariffs on some of America’s top trading partners doesn’t bode well for the stock market. If the President-elect follows through on his social-media-announced plan to slap 25% tariffs on Mexico and Canada, Wall Street analysts expect some specific stock sectors to suffer. A separate Trump pledge to inflict an additional

3 Breakout Growth Stocks You Can Buy and Hold for the Next Decade

The year is drawing to a close, and what a year it has been for the stock market. As of this writing, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are up 26%, 28%, and 19%, respectively. That said, there are many growth stocks that have far outpaced the benchmark indexes and could

Dow Closes Above 45,000 for First Time; S&P 500, Nasdaq Stretch Records

Market Closed – USA 04:39:11 2024-12-04 pm EST After hours 04:01:11 pm 6,086.49 PTS +0.61% 6,085.48 -0.02% This article is reserved for members Not a member ? Free registration Tech rally, Powell comments boost indexes to record closing highs Dec. 04 RE Astera Labs Insider Sold Shares Worth $13,593,865, According to a Recent SEC Filing

Dow closes above 45K for first time as Nasdaq, S&P 500 all hit all-time highs

All three major US stock indexes scored record closing highs on Wednesday as technology shares rallied after upbeat results from Salesforce and as comments by Federal Reserve Chair Jerome Powell gave a late boost to the market. The Dow Jones Industrial Average finished above 45,000 for the first time, climbing 308.51 points, or 0.7%, to 45,014.04. The S&P

Notable Wednesday Option Activity: TSLA, DAKT, COIN

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Tesla Inc (Symbol: TSLA), where a total volume of 1.0 million contracts has been traded thus far today, a contract volume which is representative of approximately 103.8 million underlying shares (given that every 1 contract represents 100

What’s Going On With Magnificent 7 Stocks?

What’s Going On With Magnificent 7 Stocks? Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Aswath Damodaran, finance professor at New York Univerisity’s Stern School of Business, told Bloomberg Television on Monday that he recommends buying any of the Magnificent Seven stocks on dips.  What To

How a Dior handbag, a tax scandal, and a furore over the price of spring onions triggered Yoon Suk Yeol’s downfall

Backed into a political corner, with a hostile parliament and tanking approval ratings, South Korea’s President Yoon Suk Yeol opted for the nuclear option. In a late-night televised address, the beleaguered president and former prosecutor announced he was imposing martial law. “To safeguard a liberal South Korea from the threats posed by North Korea’s communist

Can STM’s Partnership With Renault’s Ampere Push the Stock Upward?

STMicroelectronics STM shares have plunged 48.6% on a year-to-date (YTD) basis against the Zacks  Semiconductor-General industry and the Zacks Computer & Technology sector’s return of 127.4% and 29.8%, respectively. Over the same time frame, shares of its competitors, including NVIDIA NVDA, Amtech Systems ASYS and Texas Instruments TXN, have climbed 183.2%, 35.9% and 15.7%, respectively.

U.S. Stocks Rise After Tech Companies Report Gains Boosted By AI

U.S. stocks rose on Wednesday after tech companies reported better-than-expected revenue boosted by using artificial intelligence (AI). Stock Indexes Climb The three major stock indexes, which measure how stocks perform, were up early Wednesday. The S&P 500 climbed 0.4 percent in morning trading while the Dow Jones Industrial Average went up 181 points (0.4 percent)

Delaware struggles with Tesla investors’ disregard for governance

Unlock the Editor’s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Does Elon Musk really need more money? Tesla shares are up 42 per cent this year, much of that since the election of the billionaire’s new best friend Donald Trump as president last month. As

Is Sirius XM Finally a Tesla Stock Play?

A nagging blindspot for Sirius XM Holdings (NASDAQ: SIRI) investors and most Tesla (NASDAQ: TSLA) drivers is finally starting to fade in the rearview mirror. Tesla’s best-selling vehicles — the Model Y, Model 3, and Cybertruck — don’t ship with factory-installed satellite radios. Only the higher-priced Model S and Model X come with Sirius XM

Tech stocks hit first all-time high since July

Yuichiro Chino | Moment | Getty Images Technology stocks powered to new highs on Wednesday as the tech-heavy Nasdaq Composite rallied 1% and investors poured into key software and megacap players. The Technology Select Sector SPDR Fund (XLK) advanced 1.5%, rallying for its fourth straight day since mid-October and knocking out its previous high touched

Palantir Technologies Stock Rises after U.S. Government Upgrades Its Authorization

Big data analytics and artificial intelligence (AI) company Palantir Technologies (PLTR) continues its winning streak this year after being granted FedRAMP High Authorization by the U.S. government. FedRAMP is a federal government program that seeks secure cloud services. With it, the government can standardize security and risk assessment for cloud technologies and federal agencies. Don’t Miss

Tesla Stock: Is TSLA Outperforming the Consumer Discretionary Sector?

Tesla, Inc. (TSLA), headquartered in Austin, Texas, designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. With a market cap of $1.1 trillion, the company owns its sales and service network and sells electric power train components to other automobile manufacturers. Companies worth $200 billion or more are generally described as “mega-cap

Protesters say South Korea martial law shows ‘how easily democracy can be threatened’

Seoul CNN  —  Candle-lit vigils and rallies were held across South Korea on Wednesday, a nation outraged and frustrated by the president’s surprise declaration of martial law the night before called for his resignation. Outside the National Assembly Hall in the capital Seoul, hundreds of people gathered on the steps as inside, opposition parties attempted

These 3 Outstanding Dividend-Growth Stocks Could Fund Your Retirement

Dividend-growth investing remains one of the most reliable paths to building lasting wealth in the stock market. The appeal of steady, rising income streams is particularly compelling for retirement planning. After all, traditional fixed-income investments often struggle to keep pace with inflation, making dividend-growth stocks an essential component of a well-designed retirement strategy. While many

0
Would love your thoughts, please comment.x
()
x