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Despite the 50% jump in stock, analysts express concern over ARM.


Feb 11, 2024

Last Thursday, the British chip company arm holdings caught the attention of Wall Street when it jumped about 50% in one day, completing a jump of 125% since it was issued less than six months ago, to a value of about 118 billion dollars. The recent increase was attributed to encouraging reports and strong forecasts for the future thanks to high demand from the field of artificial intelligence. This has led to speculation about whether arm is the new hot stock on Wall Street or if investors were blinded by the artificial intelligence and the increase was spotty.

Arm is a leading company in the chip world, with its architecture being the basis for nearly all companies in the industry. Their chips are used in a variety of fields including cellular, vehicles, IOT, and data centers, making the company a key player in the technology industry. Softbank, a Japanese investment fund, owns about 90% of arm shares and benefits from the company’s success.

While arm’s recent results significantly exceeded analysts’ forecasts, the sharp jump in the company’s share price last weekend, which amounted to 50% in two days, could indicate a sign of pessimism in the company. Analysts have noted that arm’s current pricing is one of the highest in the market, leading to debates about its attractiveness as an investment compared to other companies in the field. The recent sharp jump in the stock was attributed to a short squeeze, which led to a significant increase in the stock and impacted the market.

The fact that Softbank owns a high proportion of arm shares is expected to cloud the stock in the future, and any increase in the stock price makes the sale more attractive for the Japanese fund. This raises concerns about a potential sale in large proportions that may bring down the share price, and the market is watching a specific date – March 12th – when shareholders, led by Softbank, will be able to sell their shares.

By Editor

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