The chip giant’s market value has doubled this year. That’s good news for Japan’s SoftBank, a major investor in technology. Matthew Partridge reports
A surge in the share price of semiconductor giant Arm Holdings in recent weeks means the US-listed firm is now worth more than all but two FTSE-100 companies (Shell and AstraZeneca), says Matthew Field in The Telegraph. Its value has more than doubled in 2024. Arm designs “critical technology used in billions of microchips”. Last week the stock received an additional fillip when the group reported booming sales, with revenues rising by an annual 14% in the fourth quarter of 2023. Management ascribes this impressive result to “strong momentum and tailwinds from all things AI [artificial intelligence]”.
The increase in sales, combined with a further expected rise of 11% this year, is certainly “significant”, but not in itself enough to justify the “mad leap” in its share price, say Robert Armstrong and Ethan Wu in the Financial Times. In fact, there is something “slightly off” about Arm benefiting from the AI hype given that it specialises in central processing units (CPUs), while AI computing “is driven primarily by graphics processing units (GPUs).
While the AI boom will create demand for “lots of ancillary computing tasks”, many of which will rely on data centres powered by Arm chips, most analysts agree that Arm is “near the bottom” of the list of AI winners.
Boost from consumers
Arm is only benefiting indirectly from the AI boom at present, via consumers buying more data-storage capacity, but this is set to change, says Kyle Wiggers in Techcrunch. Arm expects direct sales to rise “as consumers buy new laptops and other devices with chip-accelerated AI features”. What’s more, AI-supporting chips “will command higher royalty revenu
