Despite lowering its targeted valuation earlier this month, Arm's valuation remains high for a chip company, with only semiconductor-maker Nvidia worth more. Arm's high share price is partly attributed to the expected benefits from the hype around artificial intelligence (AI), which requires increasingly powerful chips. The company, which has over 500 clients including Samsung, Google, and Apple, predicts that 70% of the world's population use Arm-based technology.
Key takeaways:
- British chip designer Arm has secured a $52.3bn valuation in its initial public offering (IPO), making it the biggest IPO of the year and the largest Wall Street has seen since Rivian Automative’s market debut in 2021.
- The company, which is owned by Japanese investor SoftBank, sold 95.5m shares at $51 each, raising $4.87bn for Softbank.
- Arm Holdings has over 500 clients including Samsung, Google, and Apple, and its chip designs are used in a wide range of products, from iPads and mobile phones to cars and smart TVs.
- Despite its high valuation, some analysts suggest that Arm's elevated share price is partly due to the expected benefits the sector will receive from the hype around artificial intelligence (AI), which requires increasingly powerful chips.