Arm shares surged 29% on Monday, extending the previous week’s rally as investors continue to commend the chipmaker’s better-than-anticipated third-quarter earnings and its standing in the artificial intelligence surge.
Arm has now risen by 93% since it released its quarterly financials on Feb. 8, although there is no distinct catalyst for Monday’s movement.
The stock has nearly tripled since Arm’s initial public offering in September, closing at $148.97, and currently holds a value of almost $153 billion, just over $30 billion shy of Intel’s market cap.
Last week, Arm announced it could double the price for its latest instruction set, representing 15% of the company’s royalties, indicating potential margin expansion and increased earnings from new chips.
Additionally, it disclosed its entry into new markets such as cloud servers and automotive sectors, driven by the demand for AI.
The company’s robust royalty performance combined with Arm’s optimistic growth outlook has positioned it as the latest darling of investors interested in AI, despite having a higher earnings multiple compared to Nvidia or AMD.
However, the true value of Arm may become more evident next month when the 180-day post-IPO lockup period expires.
SoftBank still retains 90% ownership of the outstanding stock, leading to a significant increase in its stake in Arm by over $61 billion since the company’s recent report, now valued at over $131 billion.
For the second time in three trading sessions, Arm’s daily trading volume surpassed 100 million shares, exceeding the stock’s average by more than 10 times.
