UK chip designer Arm Holdings has seen its stock market value almost double in less than a week as investors bet on the artificial intelligence (AI) boom.
The Cambridge-based company reported financial results last Wednesday that showed demand for AI-related technology is boosting its sales.
Chips designed by Arm already power almost every smartphone in the world.
The firm was taken private by Japan’s SoftBank in 2016 and it returned to the stock market last September.
Arm’s shares have soared since its earnings announcement last week and are now up by more than 98%.
It comes as chipmaker Nvidia has seen its shares more than triple in value in the last year on soaring demand for its AI chips.
The AI boom has helped Nvidia become one of the most valuable publicly-traded companies in the world, with a stock market valuation of around $1.8 trillion (£1.4 trillion).
It has also made it the fifth publicly traded US company to join the so-called “Trillion-dollar club”, along with technology giants Apple, Microsoft, Alphabet and Amazon.
Arm’s technology is not directly used for AI work, but chip makers like Nvidia are choosing it for central processing units (CPUs) that complement their AI-specific chips.
Aside from Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC), Arm’s customers also include well-known consumer brands like Apple.
Demand for Arm-designed chips is also growing in the car making industry thanks to the development of self-driving technology.
Arm was founded in 1990 by a group chip designers in the university city of Cambridge.
It was bought by SoftBank in 2016 for $32bn. Four years later, the Japanese conglomerate announced that it planned to sell Arm to Nvidia.
However, in April 2022 SoftBank shelved the deal after facing objections from regulators around the world and said it would instead sell shares in Arm on the Nasdaq stock exchange in New York.
The jump in Arm’s shares is welcome news for SoftBank, as it has been hit by losses due to the falling valuations of some of its investments, including struggling office space firm WeWork.
SoftBank, which still holds a roughly 90% stake in Arm, has seen its own shares gain almost 30% in the past week.
