SAN FRANCISCO – Arm Holdings soared again on Feb. 12, extending a three-day rally that boosted the company's value by nearly 100 percent after a blockbuster earnings report last week showed spending on artificial intelligence (AI) boosting sales .
Shares of the chip designer rose 29 percent on Feb. 12, closing with record volume that was more than 10 times the average over the past three months.
The increase pushed the stock's gains to more than 90 percent in the three trading sessions since Arm's results were released after the market closed on Feb. 7.
“What you’re seeing here is a feeding frenzy for everything AI-related,” said Dennis Dick, a trader at Triple D Trading.
“Algos get involved, retailers get involved, people buy options. It’s all just a snowball effect.”
Arm benefits from a push beyond smartphone technology, contributing to growth and profitability.
Last week, the company forecast revenue of $850 million to $900 million for the March quarter, easily beating the average analyst estimate of $778 million.
CEO Rene Haas said the opportunities AI offers are still in their infancy.
The enthusiasm for the shares sparked remarkable trading activity, with much of the gains coming after just a few hours of trading.
Within the first 36 minutes of trading on February 8, the stock peaked at nearly $127, and in the most recent session, most of the rally was concentrated in the first 108 minutes of the day.
So far, Nvidia has been the biggest beneficiary of AI-driven demand for computing power.
The chipmaker's shares have more than tripled in 2023 on a rise in sales and profits related to sales of its so-called AI accelerator chips.
Nvidia's rally continued into 2024, sending the stock up another 46 percent and briefly increasing its market value beyond that of Amazon.com.
Arm and Nvidia were once set to merge as part of a $40 billion deal announced in September 2020, but ultimately dropped the plans.
The merger was met with resistance from the start, as Arm's own customers scorned the idea and regulators vowed to scrutinize it closely.
Arm has nearly tripled in value since its shares debuted in September and now has a market value of more than $150 billion, making it more valuable than Boeing and AT&T.
The Cambridge, England-based company is still 90 percent owned by SoftBank Group, which acquired the company in 2016 for $32 billion.
“We're at a point where it's moving parabolically and that means there's significant market capitalization going on because it was a fairly large company to begin with,” Mr Dick said. BLOOMBERG
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