Semiconductor giant Arm floated in New York last year Photo: BRENDAN MCDERMID/REUTERS
British semiconductor giant Arm reaches valuation worth more than $130bn (£103bn) just months after listing on the New York Stock Exchange and abandoning its London listing.
Arm shares rose as much as 64% on Thursday after as the company announced strong third-quarter sales. It is only the second set of financial figures since the US was chosen over the UK to list last September.
Share price rises will mean that only three FTSE 100 companies – AstraZeneca, Shell and HSBC – will be worth more than Arm, which is listed on the London Stock Exchange until 2016. The stock later fell slightly and was trading about 55% higher.
Arm, whose microchip technology powers billions of processors, including the vast majority of the world's smartphones, is majority owned by Japanese tech giant SoftBank, which took the former FTSE 100 company private in 2016.
Latest This year, the company, this time in New York, was included in the largest public listing of the year. The decision was a blow to Rishi Sunak, who had personally urged executives to list the company in London.
Arm beat Wall Street expectations on Wednesday evening, increasing revenue 14% to $824 million. The company saw its licensing revenue rise – payments from customers who buy its technology, and record royalty income – ongoing payments for every chip made using its technology.
Sales have been boosted by the artificial intelligence boom, which has increased demand. for many types of microchips. Arm's chip technology is most effective in low-power devices such as smartphones and Internet of Things gadgets, which are expected to increasingly use artificial intelligence next year.
However, a growing share of revenue is coming from China , which is considered a potentially problematic business due to US sanctions on the country and because Arm's business there depends on a joint venture with a Chinese company.
Division executives told analysts that 25% of revenue came from China, up from 20% three months earlier.
Earnings halved to $87 million due to higher research and development costs and expenses related to bonuses for employee shares based on the results of the previous year. in annual float.
Shares rose as Arm raised its full-year revenue forecast and said it plans to spend less than originally expected.
SoftBank and other Arm insiders will be able to sell shares in the coming weeks due to a 180-day freeze following the completion of the listing.
SoftBank said on Thursday it made a profit of 950 billion yen (£5 billion) in the third quarter of its financial year, helped by investments such as Arm and food delivery app DoorDash.
Masayoshi Son, the company's billionaire founder, said he hopes to return to big bets on technology companies after investment slowed due to failures such as the office company WeWork.