Arm stock jumps 20% highly anticipated IPO

British chipmaker Arm debuted on the public markets, with shares jumping 10% and climbing over 20% in the first 30 minutes of trading.

Arm, the British chipmaker, made its debut on the public markets on Thursday with an opening price of $56.10 in afternoon trading. The company's shares immediately saw a 10% jump and continued to climb, surpassing $61 within the first 30 minutes of trading. Prior to the IPO, Arm's shares were priced at $51 each.

At the start of trading, Arm had a valuation of $54.5 billion, but its market cap quickly exceeded $60 billion. This IPO marks the most high-profile debut on the Nasdaq since the IPO boom of 2021, which subsequently experienced a downturn in 2022. Since then, the IPO market has been relatively quiet, with only a slow pickup in activity, including the IPOs of beauty company Oddity and Mediterranean restaurant chain Cava over the summer. However, the recent filings of Instacart and Klaviyo, along with Arm's successful opening, indicate a resurgence in IPO activity.

According to Miller Tabak strategist Matt Maley, Arm's IPO could have significant implications. Its success could potentially revitalize a market that has been dormant for over a year and shed light on the current state of artificial intelligence (AI). Maley notes that while there is still hype surrounding AI, there is not the same level of euphoria as before.

However, it's important to note that the movement of these IPOs does not necessarily indicate favorable valuations. Arm, for example, reportedly aimed for a valuation between $60 billion and $70 billion. Similarly, Instacart, which was valued at $39 billion in its 2021 funding round, is now seeking a valuation of $9.3 billion.

Arm stands out among tech companies as a chip designer whose customers include major players like Apple. Rainmaker Securities managing director Greg Martin describes Arm as a unique company with significant growth potential in AI. Despite experiencing stagnant growth last year, Arm has undergone several transitions, including its acquisition by SoftBank in 2016 and a failed acquisition attempt by Nvidia in 2021.

In recent years, Arm has shifted its focus away from the smartphone market and towards AI. This change in strategy, along with adjustments to pricing and customer licensing, reflects the company's efforts to adapt and capitalize on new opportunities.

The return of Arm to the public markets is a pivotal moment for the tech sector. Its performance in this IPO could have far-reaching implications. A lackluster debut could pose challenges for the overall tech sector, while a strong showing could provide a boost to a market that has been trading sideways for months.

Please note that this story is still developing, and updates will be provided as more information becomes available.

Allie Garfinkle, a Senior Tech Reporter at Yahoo Finance, contributed to this article. For more in-depth analysis of the latest stock market news and events impacting stock prices, click here.