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Chip pioneer Arm reaches $54 billion valuation

The long-awaited initial public offering for the company that made mobile computing explode has been set at $51 per share
Chip pioneer Arm reaches $54 billion valuation
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Chip designer Arm is known for providing its technology to major mobile customers including Apple, Google, Samsung and Amazon, ultimately providing its technology to almost every phone. In fact, 99% of mobile processors worldwide feature Arm tech.

Now having priced its initial public offering, shares in Arm are available at $51 each, giving the chip creator an overall valuation of more than $54 billion.

The initial public offering has long been awaited, and trading has finally started today. It is expected to close on September 18.

The power of artificial intelligence

And it's not all a trip down memory lane. As part of the AI buzz, Arm is seeking to play an increasing part in the revolution, being at the heart of more chips that are designed with AI applications in mind.

Nvidia, another one of Arm’s customers, predicts that its own revenue will be 170% greater than last year thanks to AI chips this quarter, proving just how powerful an AI push can be. Sales spiked even further this quarter than the last, when the company’s value reached a staggering $1 trillion for the first time - bringing Nvidia into ranks with Apple, Alphabet, Amazon and Microsoft.

The chips UK-based Arm is making should carry a price-to-earnings multiple of approximately 104.

Arm is listing as many as 95.5 million American depository shares on the Nasdaq Global Select Market with current owner SoftBank's subsidiary controlling the majority of outstanding shares - roughly 90% of them. Google, Apple, Nvidia, Intel and others have stated their intent to buy up remaining shares.

Sharing a similar fate to much of the gaming industry last year, Arm’s last financial year ended with a fall in revenue, though only by less than 1%. The fiscal year ended with $2.68 billion in revenue, while net income fell to $524 million - a 22% drop.

Another British company looking to AI is Scriptic, a London-based studio that has raised $6.2 million in its second seed funding round. The studio jumped on generative AI in story-based media early.