Arm Rally Continues into Second Week with 29% Increase

The chairman and CEO of SoftBank Group Corp, Masayoshi Son’s venture, Arm shared increased by 29% on Monday. This share price jump comes after the extended rally from the previous week when investors responded enthusiastically to Arm’s promising third-quarter earnings. The semiconductor company’s shares have now surged 93% since they published their quarterly financial report on 8th February. Though any decisive reason behind Monday’s surge is not evident, the market cap of the company now stands at around $153 billion, which is almost $30 billion less than Intel’s.

Arm’s shares have almost tripled since its IPO in September, closing at $148.97. The company recently announced that for their latest instruction set, they may double the prices, which can account for about 15% of Arm’s royalties. This strategy indicates that Arm might expand their profit margin and boost earnings from new chips. The new markets company is trying to break into, like cloud servers and automotive, will reportedly increase the demand for AI.

Thanks to its successful performance forecast and the royalty strength, Arm has become a popular choice among AI investors, even though it has a higher earnings multiple than AMD or Nvidia. However, Arm’s real value will become more apparent next month when the post-IPO lockup period, which lasts 180 days, is over. Interestingly, SoftBank still owns 90% of the outstanding shares. This means that since Last week’s report, Arm’s value has risen by over $61 billion, which now makes Arm worth more than $131 billion.

On the last trading session, Arm’s daily volume surpassed 100 million shares, and this was more than 10 times the average for the company. The article ended with a note emphasizing the promising future growth of Arm, driven by its clear AI narrative.

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