Arm IPO -> Chip Stocks To Look Out -> NVDA, AMD, TSM
I have shared before about ARM IPO in 30 April and now we are in the final stage to see ARM ticker available for us to trade.
ARM IPO - Good Opportunity into A.I. Chip stocks
So how shall we trade ARM? In this article I shall share an updates on how we should be approaching this opportunity.
Arm’s Current Financial Standings
As reported, draft filing shows that Arm’s revenue has fell last year in 2022. This decline in revenue is according to U.S. Accounting standards.
Whereas Arm’s parent SoftBank posted gains for unit under IFRS.
Why Arm IPO is a focus now
U.S. markets have been in unstable state as tech valuations have fallen sharply from its peak during the 2021 Tech Boom.
In 2021 shares like Palantir and UiPath rose to seismic levels as investors grew excited by their growth prospects in the boom times.
This IPO will likely to be one of the highest-profile floats in recent years and could provide a much needed boost to the IPO market.
Especially now that the IPO has drawn the attention of such large names in Apple, Amazon and NVIDIA, more investment interest will follow.
What Arm can bring to the A.I. space
Arm valuation is still not clear after a listing was confidentially filed earlier this year. But market is estimating the market value to be between $60 billion and $70 billion.
Arm have been presenting itself as an AI company and it has been touted to be a leading player for the chip industry. Investors are looking out for Arm’s S-1 filing to see how it sees the technology benefiting its business over time.
Arm in May this year has come up with two new chipsets which is targeted at machine learning applications.
CPU called Cortex-4 : this is a chipset that delivers faster machine-learning performance and consumes 40% less power than its predecessor
GPU called G720, this chipset offers better performance and uses up 22% less memory bandwidth than its predecessor.
As compared to high-powered chips like those offered by Nvidia and AMD which are critical to AI applications. These chips require lots of computing power to run smoothly.
Nvidia has released its new Grace Hopper chip for generative AI applications, which is based on Arm architecture.
Who are ARM’s competitors?
ARMs main competitors are still the likes of IBM, Intel and AMD who also produce semiconductor chips. Although, ARM no longer has any significant competition within the smartphone chip space.
In terms of graphic processing units (GPUs), ARM faces competition from other giants like NVIDIA, Qualcomm and Intel. Although its worth pointing out that for the most part, these other manufactures have combined their proprietary GPUs with ARM-licensed designs.
Opportunity Arm IPO Hope to Capture
Arm IPO might be in time to capture the AI hype which has simmered down with the recent market volatilty.
But recently with the Nvidia earnings release coming up, I would think focus on chip makers like AMD, TSMC would have investors interest and confidence coming back.
The growth of AI will not come down as enterprise would be planning for a long term ROI rather than a one time project. This would very much sit in well with Arm IPO.
How I Would Plan My Trade With Arm
I would be focusing on these stocks like $NVIDIA Corp(NVDA)$ $Advanced Micro Devices(AMD)$ $Taiwan Semiconductor Manufacturing(TSM)$
These are the stocks which will most likely be affected close to Arm IPO, but there are potential to find a good trade point in these stocks.
I think we should not see Nvidia and AMD chips to be a competitor to Arm new chips, rather they should complement each other in any new A.I. projects as each of them have their own advantages.
Summary
I will be looking forward to Arm IPO when it is nearing. The valuation amount will be something to look out for.
I do not foresee a big investors hype to start loading this stocks, I think we should take a lesson from the recent VinFast.
Appreciate if you could share your thoughts in the comment section whether you would be focusing on chips stocks amidst Arm IPO?
@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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if NVIDIA can also get a contract with another party like Samsung for say 5,000 units, that would mean virtually doubling capacity for NVIDIA. That's a $2T valuation right there, without pulling much of a sweat.
What happens when true self-aware Artificial Intelligence invests in NVDA - the exact company that made the AI being come to life in the first place?
And to replicate itself as the superior ‘being’ it is, it needs to invest in the largest growth opportunity of the century. So it invests in NVDA stock. At the same time, it self-replicates by purchasing more H100 chips, building a clone of itself, and repeating the cycle.
At some point, does the growth become exponential - where multiple AI systems all configured with qty256 H100s are investing in NVDA, as well as procuring more clones of itself?
I think people are superestimating demand for AI chips lol. If NVDA dont crush on these reports its gonna drop hard
True and this company has proven itself over and again. No one can match their speed of innovation so far.
I don't think the boys at Nvidia even see AMD coming (This is good) Intel didn't either! GLTAL
Wow