Arm boosted by chip sales amid AI ‘frenzy’

THE British semiconductor champion Arm has eclipsed the value of all but two FTSE 100 companies as shares rallied after it posted booming sales.

Shares in Arm changed hands for more than $158 yesterday, up 33pc on its closing price on Friday, valuing the business at more than $155bn (£123bn).

The jump means Arm is now behind only Shell and Astrazeneca in the values of FTSE 100 companies, which are worth £162bn and £147bn respectively.

Arm’s stock has more than doubled so far this year as investors flock to the microchip designer. Its value has soared 159pc since it went public on New York’s Nasdaq exchange in September.

The skyrocketing share price has seen the company’s overall value top HSBC, Unilever and BP.

The Cambridge business, which was listed in London before it was taken private by Japan’s Softbank in 2016, designs critical technology for microchips in smartphones and data centres.

Despite efforts by Rishi Sunak to lure it back to the Square Mile, Arm opted for a bumper New York float that valued the business at around $55bn. Last week, Arm reported an increase inrevenues of 14pc to $824m. Rene Haas, Arm’s chief executive, told investors it was seeing “strong momentum and tailwinds from all things AI”.

Technology shares in the US have driven the S&P 500 to record highs this year, prompting some analysts to warn of an Ai-driven bubble. Microsoft, Amazon, Apple, Meta, Alphabet, Tesla and Nvidia now have a combined market capitalisation of more than $12trillion.

Richard Windsor, an independent analyst, said Arm had benefited from comparisons to US rival Nvidia which overtook the value of Amazon yesterday with a price tag of $1.8trillion. He added: “The market loves anything that has exposure to the current frenzy.”