Sep 14, 2023 - Economy
Arm's strong performance spurs U.S. IPO optimism
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Arm Holdings, the British semiconductor design giant, rose in its trading debut Thursday, in a vote of confidence for the sluggish U.S. IPO market.
Why it matters: Last year was the worst for U.S. public offerings in over 30 years.
- While activity has picked up a bit in 2023, Arm is the largest stock offering so far this year — raising roughly $4.9 billion in a share sale that valued the firm at $52.33 billion — and thus an important test of investor appetite for stocks.
Yes, but: ARM isn't just any stock, it's a well-known company that's part of the high-flying semiconductor sector.
- Chip stocks have soared this year, largely due to excitement over big corporate spending on chip-heavy AI technology.
- AI chip leader, Nvidia, is the top stock in the S&P 500 this year, having risen more than 200%.
State of play: Arm shares priced at $51, and rose 25% after they began trading at around 12 p.m. in New York, in a respectable showing.
The bottom line: All things equal, Arm's reception by investors should help build a bit more confidence among executives and bankers looking to tap the market.
- What's next: Two highly anticipated IPOs are on tap next week — for grocery delivery company Instacart and marketing SaaS company Klaviyo, Axios' Dan Primack reports.
