Arm climbs 19% in Nasdaq debut after pricing IPO at $51 a share
Arm CEO Rene Haas and executives cheer, as Softbank’s Arm, chip design firm, holds an initial public offering (IPO) at Nasdaq Market site in New York, U.S., September 14, 2023.
Brendan Mcdermid | Reuters
Arm Holdings, the chip design company controlled by SoftBank, jumped nearly 20% during intraday trading on Thursday after selling shares at $51 a piece in its IPO.
At the open, Arm was valued at almost $60 billion. The company, trading under ticker symbol “ARM,” sold around 95.5 million shares. SoftBank, which took the company private in 2016, controls around 90% of shares outstanding.
On Wednesday, Arm priced shares at the upper end of its expected range. On Thursday, the stock first traded at $56.10.
It’s a hefty premium for the British chip company. At a $60 billion valuation, Arm’s price-to-earnings multiple would be over 110 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% growth forecast for the current quarter.
Arm CFO Jason Child told CNBC in an interview that the company is focusing on royalty growth and providing products to its customers that cost and do more.
Many of Arm’s royalties come from products released decades ago. About half of the company’s royalty revenue, which totaled $1.68 billion in 2022, comes from products released between 1990 and 2012.
“As a CFO, it’s one of the better business models I’ve seen. I joke sometimes that those older products are like the Beatles catalog, they just keep delivering royalties. Some of those products are three decades old,” Child said.
In a presentation to investors, Arm said it expects the total market for its chip designs to be worth about $250 billion by 2025, including growth in chip designs for data centers and cars. Arm’s revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion.
Arm’s architecture is used in nearly every smartphone chip, and outlines how a central processor works at its most basic level, such as doing arithmetic or accessing computer memory.
Child said that the company sold $735 million in shares to a group of strategic investors comprised of Apple, Google, Nvidia, Samsung, AMD, Intel, Cadence, Synopsis, Samsung and Taiwan Semiconductor Manufacturing Company. It’s a testament to Arm’s influence among chip companies, which rely on Arm’s technology to design and build their own chips.
“There was there was interest to buy more than what was indicated, but we wanted to make sure we had a diverse set of shareholders,” Child said.
In an interview with CNBC on Thursday, SoftBank CEO Masayoshi Son emphasized how Arm technology is used in artificial intelligence chips, as he seeks to tie the firm to the recent boom in AI and machine learning. He also said he wanted to keep the company’s remaining Arm stake as long as possible.
The debut could kick open the market for technology IPOs, which have been paused for nearly two years. It’s the biggest technology offering of 2023.
Technology
Quantum stocks Rigetti Computing and D-Wave surged double-digits this week. Here’s what’s driving the big move
Inside Google’s quantum computing lab in Santa Barbara, California.
CNBC
Quantum computing stocks are wrapping up a big week of double-digit gains.
Shares of Rigetti Computing, D-Wave Quantum and Quantum Computing have surged more than 20%. Rigetti and D-Wave Quantum have more than doubled and tripled, respectively, since the start of the year. Arqit Quantum skyrocketed more than 32% this week.
The jump in shares followed a wave of positive news in the quantum space.
Rigetti said it had purchase orders totalling $5.7 million for two of its 9-qubit Novera quantum computing systems. The owner of drugmaker Novo Nordisk and the Danish government also invested 300 million euros in a quantum venture fund.
In a blog post earlier this week, Nvidia also highlighted accelerated computing, which it argues can make “quantum computing breakthroughs of today and tomorrow possible.”
Investors have piled into quantum computing technology this year, as tech giants Microsoft, Nvidia and Amazon have embraced the technology with a wave of new chip announcements, multi-million dollar investments and research plans.
Cfoto | Future Publishing | Getty Images
OpenAI’s new artificial intelligence video app Sora has already grabbed the top spot in Apple‘s App Store as its number one free app, despite being invite-only.
Sora, which was launched on Tuesday, allows users to create short-form AI videos and share them in a feed. The app is available to iPhone users but requires an invite code to access.
Here’s how to snag a Sora app invite code:
- First, download the app from the iOS App Store. Note that Sora requires iOS 18.0 or later to be downloaded.
- Login using your OpenAI account.
- Click “Notify me when access opens.”
A screen will then appear asking for an access code.
Currently, OpenAI has said that it is prioritizing paying ChatGPT Pro users for Sora access. The app is only available in the U.S. and Canada, but is expected to roll out to additional countries soon, the company said.
If you do not know someone who can provide an access code, several people are sharing invite codes on the official OpenAI Discord server, as well as on X and Reddit threads.
Once you input your access, you will be able to start generating AI videos using text or images. Users are also able to cameo as characters in their videos as well as “remix” other posts.
The app is powered by the new Sora 2.0 model, an updated version of the original Sora model from last year. The video generation model is “physically accurate, realistic, and more controllable” than prior systems, the company said in a blog post.
Sopa Images | Lightrocket | Getty Images
OpenAI now has two of the top three free apps in Apple’s App Store, and its new video generation app Sora has snagged the coveted No. 1 spot.
The artificial intelligence startup launched Sora on Tuesday, and it allows users to generate short-form AI videos, remix videos created by other users and post them to a shared feed. Sora is only available on iOS devices and is invite-based, which means users need a code to access it.
Despite these restrictions, Sora has secured the top spot in the App Store, ahead of Google‘s Gemini and OpenAI’s generative chatbot ChatGPT.
“It’s been epic to see what the collective creativity of humanity is capable of so far,” Bill Peebles, head of Sora at OpenAI, wrote in a post on X on Friday. “Team is iterating fast and listening to feedback.”
Sora is powered by OpenAI’s latest video and audio generation model called Sora 2. OpenAI said the model is capable of creating scenes and sounds with “a high degree of realism,” according to a blog post. The startup’s first video and audio generation model, Sora, was announced in February 2024.
OpenAI said it has taken steps to address potential safety concerns around the Sora app, including giving users explicit control over how their likeness is used on the platform. But some of the initial videos posted to the app, including one that depicts OpenAI CEO Sam Altman shoplifting, have sparked debates about its utility, potential for harm and legality.
“It is easy to imagine the degenerate case of AI video generation that ends up with us all being sucked into an RL-optimized slop feed,” Altman wrote in a post on X on Tuesday. “The team has put great care and thought into trying to figure out how to make a delightful product that doesn’t fall into that trap, and has come up with a number of promising ideas.”
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment12 months agoHere are the best electric bikes you can buy at every price level in October 2024