Arm Holdings, a UK chip designer, has experienced tremendous growth in its stock market value over the past week. Its stock price has almost doubled in value due to the increasing demand for artificial intelligence (AI). This demand is reflected in the company’s recent financial results, which showed a significant boost in sales related to AI technology.
Arm chips are used in almost every smartphone in the world and are also used in the automotive industry due to the development of self-driving technology. Although Arm’s technology is not directly used for AI, chip makers like Nvidia are choosing Arm for CPUs that complement their AI-specific chips. In addition to Nvidia and Taiwan Semiconductor Manufacturing Company, Arm’s customers also include well-known consumer brands like Apple.
The news of Arm’s soaring valuation comes at a time when chipmaker Nvidia has also seen extraordinary growth. Its shares have more than tripled in value over the past year, making it one of the most valuable publicly-traded companies in the world, worth around $1.8 trillion. The increase in stock market value opens up new opportunities for both companies and their respective owners, SoftBank and Japan’s SoftBank Group Corporation which still holds a roughly 90% stake in Arm.