Arm Holdings PLC, the British chip design company, went public on the Nasdaq stock exchange on September 14, 2023, with an IPO price of $51 per share.
After the first day of trading, The stock closed the day at $63.59, up 24.68% from its IPO price. This gave Arm a market capitalization of $65 billion.
SoftBank Group Corp., Arm’s parent company, still owns about 90% of the company after the IPO. However, SoftBank has said that it plans to gradually sell down its stake over time.
Arm’s IPO was highly anticipated, as the company is a major player in the semiconductor industry.
Arm’s advantages in terms of power efficiency, cost, openness, and innovation make it a valuable partner for companies that are developing new devices and applications.
Arm is a leading provider of chip designs for a wide range of devices, including smartphones, tablets, laptops, and servers. Over 95% of smartphones around the world use the company’s technology.
Arm’s customers include some of the biggest names in technology, such as Apple, Google, and Samsung. Apple has used Arm processors in its iPhones and iPads since 2010. The company’s M1 and M2 processors, which are based on Arm architecture, are also used in its MacBook laptops
In addition to the above, Arm is also well-positioned to benefit from the growth of new markets such as the Internet of Things (IoT) and artificial intelligence (AI). Arm processors are well-suited for these markets because they are power-efficient and can be customized to meet the specific needs of different devices and applications.
Arm also faces some specific risks, such as:
- Reliance on a few customers: Arm relies on a few customers for a large portion of its revenue. This means that the company is exposed to the risk of customer concentration.
- China risk: Arm has a significant business in China, and the company is exposed to the risks associated with doing business in China, such as regulatory changes and intellectual property theft.
- RISC-V: RISC-V is an open-source chip architecture that is gaining momentum. RISC-V could pose a competitive threat to Arm in the future.
- For price, SoftBank holds 90% of Arm, SoftBank has a lot of control over Arm policy and stock price. Only invest in Arm if you are comfortable with this risk.
Overall, Arm is a leading semiconductor company with a strong track record of innovation. The company’s processors are used in a wide range of devices, and Arm is well-positioned to benefit from the growth of new markets such as the IoT and AI.
