British chipmaker Arm ( ARM ) made its debut on the public markets on Thursday, opening at $56.10 on the Nasdaq in afternoon trading.
ARM shares jumped 10% in early trading and rose more than 20% to $61 in the first 30 minutes of trading. The stock closed about 25%. Going into the IPO, shares were priced at $51 each.
The company opened trading at a valuation of $54.5 billion, but the company’s market cap has risen north of $60 billion.
“This is a good first step toward reopening the US tech market after an 18-month drought of IPOs,” Blueshirt Group managing director Mark Roberts told Yahoo Finance Live on Thursday.
The chip maker’s go-public is the highest IPO the Nasdaq has seen since the 2021 IPO boom, with the 2022 cycle going under the bus.
Since then, the IPO market has been relatively quiet, picking up slowly with IPOs. Beauty company Oddity (ODD) and Mediterranean restaurant chain Cava (CAVA) in the summer. That trick has at least extended to a stream of IPOs, arm’s length and more recently Instacart (CART) and Clavio.
“This could be a lot more important than people think,” Miller Tabak strategist Matt Maley told Yahoo Finance Live on Thursday ahead of the IPO. ” if so [Arm] Well, that certainly helps open things up for a market that’s been around for over a year now. It’s going to tell us something about this with AI. There’s still a lot of hype around it, but not a lot of excitement.”
However, just because these IPOs are moving doesn’t mean their valuation isn’t a sticking point. In Arm’s case, the company is reportedly seeking a valuation of between $60 billion and $70 billion.
Crunchbase’s senior data editor Jenne Thiere told Yahoo Finance that Arm’s official debut “is a bell ringer, but it needs a little more than one company to make sense of a shift.”
It also does
ARM is a unique company, especially among tech companies. As a chip designer, Arm’s clients include some of the biggest names in technology, including Apple ( AAPL ).
“This is a one-to-one company. However, we have to be very careful,” Greg Martin, managing director of Rainmaker Securities, told Yahoo Finance Live. It is a ubiquitous chip design in 99% of our smartphones. It didn’t grow last year, but it has huge growth potential… with AI.”
The company has gone through several transitions over the past several years. In the year In 2016, SoftBank acquired Arm; Taking about 30 billion dollars. In 2021, Nvidia ( NVDA ) tried to acquire Arm in . A failed deal After a year and a half of regulatory oversight.
Recently, ARM has attempted to change its revenue model, changing pricing and rolling out a changed customer licensing strategy.
“They’re shifting their focus away from the smartphone area to AI,” said Maley. “Even though it’s a little informal, I think it’s a smart way to go.”
In short, ARM’s return to the public markets on Thursday was a momentous occasion.
“If this type of IPO falls a little flat, that could create some problems for the tech sector as a whole,” Maley said. “On the upside, if it’s very, very good, maybe that will help the technology sector, which has been trading sideways for a couple of months.”
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