A hand bigger than all but two FTSE 100 companies after shares surged

Chip giant Arm launched in New York last year after deciding not to launch in London. Photo: REUTERS/Brendan McDermid

British semiconductor champion Arm's share price eclipsed all but two FTSE 100 companies as shares rose after the company announced roaring sales.

Shares Arm changed hands at over $158 on Monday, up 33% from Friday's closing price. values ​​the business at more than $155 billion (£123 billion).

The jump in valuation means Arm is now behind only Shell and AstraZeneca in the value of FTSE 100 companies, which are worth £162 billion and £147 billion respectively. .

Arm shares have more than doubled this year as investors flocked to the chip designer, with its price up 159% since the company went public on New York's Nasdaq exchange in September.

The company's share price is soaring, with its total value surpassing HSBC, Unilever and BP, as investors buy claims it can benefit from a surge in interest in artificial intelligence (AI).

< p>Cambridge Company , which was listed on the London Stock Exchange before it was privatized by Japan's Softbank in 2016, develops critical technologies used in billions of microchips, including smartphones and data centers.

Despite Rishi Sunak's attempts to lure the business back to the Square Mile, Arm opted for a successful New York listing, valuing the business at around $55 billion.

Last week, Arm reported an increase in sales. revenue up 14% to $824 million. Rene Haas, Arm's CEO, told investors the company is seeing «strong momentum and tailwinds from all things artificial intelligence.»

U.S. tech stocks have driven the S&P 500 to record highs this year, prompting some analysts to warn of an AI-driven bubble.

The combined market capitalization of Microsoft, Amazon, Apple, Meta, Alphabet, Tesla and Nvidia now exceeds $12 trillion.

Richard Windsor, an independent analyst, said after Arm's results the company benefited from the comparison with US rival Nvidia, which will continue «until the AI ​​bubble bursts.» On Monday, Nvidia overtook Amazon in value with a price tag of $1.8 trillion.

He added: “The market loves anything that's exposed to the current frenzy.”