Last week, British company Arm reported on the results of the past fiscal quarter, causing investors to become increasingly excited about the prospects of business development against the artificial intelligence boom. The capitalization of Arm doubled in the three trading sessions following the announcement, causing shares to triple since the company’s IPO.
Arm’s stock prices rose by 29.3 %, reaching $148.97 per share following Monday’s trading session alone. Prior to the publication of the quarterly report, a share was valued around $77. Arm made its debut on the American stock market in September last year, listing shares at $60.75 each, however, the price soon fell to $51.32; meaning the current prices exceed this rate by almost three times. At its peak, Arm’s stock prices reached $164, resulting in an even higher increase compared to the IPO period. The company’s current value fluctuates around the $150 billion mark, a figure which might comfort SoftBank, a Japanese corporation that failed to sell its Arm assets to NVIDIA for $40 billion two years ago and is now considering an IPO in the U.S.
Yesterday’s interest in Arm’s shares was also reflected in their trading volume, which exceeded the average daily value of the past three months by more than ten times. According to analysts, Arm’s surging stock prices have been boosted by investor interest in artificial intelligence, a theme that had previously focused on securities from a limited number of issuers, including NVIDIA. Currently, Arm’s valuation exceeds that of Boeing and AT&T. The demand for Arm’s shares is also bolstered by their limited supply as SoftBank holds 90.6% of the total shares, and overall, 95% of Arm’s shares are distributed among its ten largest shareholders. For example, in NVIDIA’s case, the ten largest shareholders control no more than a third of the capital. SoftBank will be able to start selling its Arm shares after March 12, which marks the six-month period since the IPO.