Arm bigger than all but two FTSE 100 companies after shares rocket
source link: https://www.telegraph.co.uk/business/2024/02/13/arm-bigger-all-two-ftse-100-companies-shares-rocket/
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Arm bigger than all but two FTSE 100 companies after shares rocket
Chip champion’s stock has more than doubled so far this year
Chip giant Arm floated in New York last year after deciding against a launch in London
Credit: REUTERS/Brendan McDermid
British semiconductor champion Arm has eclipsed the value of all but two FTSE 100 companies as shares rallied after it posted booming sales.
Shares in Arm were changing hands for more than $158 on Monday, up 33pc on its closing price on Friday, valuing the business at over $155bn (£123bn).
The jump in its valuation means Arm is now behind only Shell and AstraZeneca in the values of FTSE 100 companies, which are worth £162bn and £147bn respectively.
Arm’s stock has more than doubled so far this year as investors flock to the microchip designer and its value has soared 159pc since the company went public on New York’s Nasdaq exchange in September.
British expat
The company’s skyrocketing share price has seen its overall value climb above HSBC, Unilever and BP as investors buy into claims it stands to benefit from a groundswell of interest in artificial intelligence (AI).
The Cambridge business, which was listed on the London Stock Exchange before it was taken private by Japan’s Softbank in 2016, designs critical technology used in billions of microchips - including smartphones and data centres.
Despite efforts from Rishi Sunak to lure the business back to the Square Mile, Arm opted for a bumper New York float which valued the business at around $55bn.
Last week, Arm reported an increase in revenues of 14pc to $824m. Rene Haas, Arm’s chief executive, told investors the company was seeing “strong momentum and tailwinds from all things AI”.
Technology shares in the US have driven the S&P 500 to record highs this year, prompting some analysts to warn of an AI-driven bubble.
Microsoft, Amazon, Apple, Meta, Alphabet, Tesla and Nvidia now have a combined market capitalisation of over $12 trillion.
Richard Windsor, an independent analyst, said after Arm’s results the company had benefited from comparisons to US rival Nvidia, which would continue “as long as the AI bubble does not pop”. Nvidia overtook the value of Amazon on Monday with a price tag of $1.8 trillion.
He added: “The market loves anything that has exposure to the current frenzy.”
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