Arm Holdings is becoming a publicly traded company, and it’s valued at $54.5 billion. This is the largest initial public offering (IPO) since 2021.
IPO Market Looks Promising
The IPO market is getting better, which might mean good things for 2024.
Arm’s Focus on AI
Arm wants to tap into the growing interest in Artificial Intelligence (AI) and position itself as a key player in tech.
Arm is a British company that designs computer chips. It’s essential to big companies like Apple and Nvidia.
Changes in Value
This IPO comes seven years after SoftBank bought Arm for $32 billion. The current value is less than before, $64 billion.
Arm’s IPO price is $51 per share, and it’s selling 9.4% of its stock. After the IPO, SoftBank will still own about 90% of Arm.
The tech IPO market has been uncertain lately, with ups and downs in prices and interest rates.
Arm expects growth in different markets. They aim for 17% growth in cloud computing, 16% in the auto industry, but only 6% in mobile phones.
Should You Invest?
Investing in Arm’s IPO might not be the best idea for regular investors right now.
Arm needs to show it can grow beyond just making chips for mobile phones, which are not selling as well lately.
Arm makes a lot of money in China, but there are risks because of the trade problems with the US.
Arm makes money from licensing its technology, and that income has been growing.
Arm’s IPO price is high compared to its earnings. It’s also expensive compared to similar companies.
Other companies are growing faster and trading at lower prices compared to Arm.
What Experts Say
Some experts think Arm’s stock is too expensive, and it needs to do really well to justify its high valuation.
Arm’s IPO is expensive, so regular investors might want to wait and see. But in the long term, it’s worth keeping an eye on because it could challenge big companies with strong resources.