Arm Stock Price Soared by 111% in February’s ‘Fire Market’

A ‘Fire Market’ Fueled By AI… Arm Stock Price Soared 111% In February Alone. There is a company that has nearly tripled in size in just five months since its debut on the U.S. stock market. This is the story of Arm, a British semiconductor design company. With the stock prices of semiconductor companies riding high on the back of the artificial intelligence (AI) craze, the market seems to be picking Arm as the biggest beneficiary.

On the New York Stock Exchange on the 12th (local time), Arm ended trading at $148.97 per share, up 29.3% from the previous day. As a result of the continued rapid rise after the 47.9% surge on the 8th, the rise rate reached 111% this month alone. Considering that the stock price was in the $50 range right after the IPO in September of last year, the ransom price has jumped about three times in five months. The market capitalization also increased to $153 billion (about 203 trillion won). The U.S. Bloomberg News reported, “It easily surpassed Boeing ($127 billion), the leading U.S. aircraft manufacturer, and AT&T ($121 billion), the largest U.S. telecommunications company.”

Performance fueled by the AI ​​craze led to a surge in stock prices. Recently, Arm predicted sales in the first quarter of this year to be between $850 million and $900 million as demand for semiconductors exploded due to AI investments by big tech companies. It significantly exceeds market expectations (about $780 million). Earnings per share (EPS) were also estimated at 28 to 32 cents, exceeding market expectations (21 cents). “AI is just the beginning,” Arm CEO Rene Haas recently told Bloomberg.

Foreign media outlets assess that Arm has joined the AI ​​semiconductor boom led by Nvidia, the ‘AI leader’. CNBC, a U.S. economic media outlet, said, “Thanks to optimistic growth expectations, Arm is the most loved by investors despite its price-to-earnings ratio (PER/stock price divided by earnings per share, the higher it means the stock is overvalued) than Nvidia or AMD. “It has become a popular AI-related stock,” he said.

NVIDIA, whose stock price has soared 46% this year, rose 3% during the day, exceeding $740, and recorded a market capitalization of $1.83 trillion, surpassing Google’s parent company Alphabet ($1.82 trillion) and Amazon ($1.81 trillion). It rose to third place after Microsoft and Apple. However, due to profit-taking sales in the latter half of the day, the stock closed with a 0.16% increase, returning to 5th place.

However, the obstacles to arm sprinting are also formidable. Immediately, on the 12th of next month, the 180-day lockup following the IPO expires, and a large amount of selling volume will be released to the market. A lock-up is a system in which major shareholders promise not to sell their shares for a certain period of time at the time of listing. Japan’s Softbank, which acquired Arm in 2016, owns 90% of Arm’s issued shares. CNBC said, “Next month, when SoftBank will have its first selling opportunity following the expiration of the lock-up period, we will be able to get a clearer picture of the stock price direction.”

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