Arm Sees Cloud Computing as Major Growth Driver in IPO

The chief executive of Arm Holdings Plc told potential investors in its roughly $5 billion initial public offering that cloud computing expansion and royalty revenue represented significant growth areas for the chip designer. Rene Haas is trying to position the British company for more than mobile phones, which have accounted for most of the company’s revenue in recent years. But a tepid global economy and weaker mobile demand have dampened sales. He also faces a push by some customers to move away from Arm’s industry-standard microprocessor designs in favor of their own.

In a gathering of more than 100 investors at one of New York’s most luxurious hotels, Haas and his management team gave details on the company’s prospects beyond the mobile phone market, which already commands a 99% monopoly. They pointed to the rapid rise of artificial intelligence, which is expected to drive demand for microprocessors and other hardware that can be used for a wide range of applications. They also cited the growing use of data centers and automotive applications as opportunities for Arm.

Investors listened closely, though they were skeptical about the technological sector prospects, which worries over slowing economic growth have plagued. In addition, many questioned how the company would deal with its exposure to China, where Arm’s revenue has declined amid weaker demand for mobile devices.

Aside from those concerns, the IPO is widely seen as a test of investor appetite for a British firm that isn’t listed on the London Stock Exchange and won’t be able to benefit from the same tax advantages enjoyed by foreign companies in the country. The offering will sell 95.5 million shares, representing about 6% of the company’s outstanding share capital. It is being led by Barclays Plc, Goldman Sachs Group Inc, and JPMorgan Chase & Co. and was priced at the top of its indicated range, meaning it is likely to raise about $5.2 billion.

The IPO is one of the highest-profile offerings in years and comes as semiconductor stocks have slumped this year, pulled down by concerns about weakening global economic growth. But if the offering does well, it could boost the overall IPO market.

Masayoshi Son, the tech billionaire with a controlling stake in Arm, has said he may decide to take the company public ahead of schedule or sell it off entirely. He has reportedly hired Goldman Sachs to explore the options.

The firm will list in the United States as an American depositary share, or ADS, on the Nasdaq Global Select Market. To apply to invest in the IPO, you’ll need to open an investment account with a broker that offers access to the AIM market where Woodboise is traded, like Hargreaves Lansdown or AJ Bell. Open an account and enter the amount you want to invest (as a monetary value rather than several shares). You can choose a stock broker to send your ARM ADSs to when you’re allocated them.

Sabrina Gonzalez

Sabrina Gonzalez is a professional writer who is passionate about writing blogs and website content. With 10+ years of experience in freelancing world, she has gained a wealth of knowledge and insights on various topics. Throughout her career, Sabrina Gonzalez has worked with many popular journal magazine site and has helped with her writing expertise. In her spare time, she enjoys reading, travelling, painting and some more, which she often incorporates into her writing. Through her writing, Sabrina Gonzalez aims to fulfill the writing needs and to share her knowledge on different topics. She believes that readers should be knowledgeable too and hopes to inspire her readers.

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