Arm IPO Update: How Much Did Arm End up Debuting for on the Market?

Key takeaways

• Arm’s IPO went swimmingly for the semiconductor company, with shares gaining as much as 25%
• $735 million was sold off to strategic Big Tech investors
• The company now has a $65 billion valuation

Arm’s IPO has officially gone down as the biggest IPO in nearly two years, with the semiconductor company’s market debut seeing a 25% lift to its initial share price during its market debut.

The shares definitely cost investors like Apple, Microsoft and Google an arm and a leg (sorry, we couldn’t resist that one), but they’d say it’s money well spent to keep the semiconductor company as the Switzerland of the industry. Here’s everything you need to know about how the Arm IPO went down.

What happened with the Arm IPO?

Remember when Arm surprised everyone last week with a lower price guidance for its IPO shares than everyone expected, and some suspected it was a cheeky ploy to drive the price higher? That’s pretty much what happened.

After pricing its shares at $51 a piece before setting off on a pre-IPO roadshow, Arm achieved the upper end of its expected price range for the shares. The company now trades under the ARM ticker and sold 95.5 million shares on Thursday, starting the trading day at $56.10 and ending at $63.59.

Arm’s CFO, Jason Child, said the company sold $735 million in shares to strategic investors, including Apple, Google, Nvidia and Samsung, among many others. Pretty much all of Big Tech relies on Arm for its semiconductor designs. Japanese investment firm SoftBank, Arm’s owner, still holds a 90.6% stake.

Arm was keen to capitalize on the hype around its debut. In a presentation to investors, the company said it predicted the total market for its chip designs to be worth around $250 billion by 2025, with growth expected in data center designs and cars.

What’s next for Arm shares?

The IPO went pretty much exactly how Arm had planned, achieving the $60 billion valuation it was after. As for those saying Arm isn’t the next Nvidia? It still isn’t in some ways — Arm doesn’t have Nvidia’s 170% growth prediction. But after achieving a $65 billion valuation at its IPO, Arm’s price-to-earnings multiple is now at 110, comparable to Nvidia’s 108.

But that doesn’t mean the headwinds Arm faces have magically disappeared, so it’s always best to exercise caution with hyped-up IPOs. It’s worth remembering that it’s a hefty valuation for a company that saw a 1% revenue drop in its latest fiscal year to $2.68 billion.

Plus, Arm has cornered the mobile phone chip market — but there’s a global slowdown in mobile sales, which has hit Apple, one of Arm’s customers, where it hurts as the new iPhone 15 was met with a blasé response.

The bottom line

Despite the macroeconomic environment, Arm achieved an incredible IPO result. Its success could kick the door open for tech companies who have been looking to debut on the stock market but have been put off by the IPO drought in the last 18 months.

It’s also a win for the burgeoning AI industry, which Arm is keen to stay tied to as it looks to be the next Nvidia. Either way, it’s vital to stay aware of any red flags before investing in a company — and Arm isn’t immune to these just because of a blockbuster debut.