Arm Holdings under Wall Street scrutiny after $4.87B IPO

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Arm Holdings under Wall Street scrutiny after $4.87B IPO
Credit: © Reuters.

Arm Holdings (NASDAQ: ARM ) Plc, following its substantial $4.87 billion initial public offering (IPO), has come under the microscope of Wall Street firms including Goldman Sachs and JPMorgan Chase (NYSE: JPM ). The IPO, which stands as the largest since Rivian (NASDAQ: RIVN ) Automotive's $13.7 billion offering, has elicited mixed reactions from analysts.

On Friday, despite a 3% rise in share price from the IPO price of $51, several analysts voiced concerns over Arm's valuation. Notably, analysts from Needham and New Constructs expressed skepticism over the company's current market value.

In contrast, New Street Research analysts remain bullish on Arm's prospects. They revised their price target upwards to $66, after increasing estimate for Arm's 2025 royalty revenue by 20%.

The performance of Arm, a majority-owned subsidiary of SoftBank (TYO: 9984 ) Group Corp., is perceived as a mirror of investor sentiment towards newly public companies. This sentiment is particularly relevant given the recent performance of other companies such as Instacart (NASDAQ: CART ) Inc. and Klaviyo (NYSE: KVYO ), which have seen their share prices fall below their respective IPO prices.

Despite these market fluctuations and varying analyst opinions, Arm continues to maintain an average price target of $53. Its journey post-IPO will be closely watched by investors and market analysts alike as it navigates through this period of scrutiny and evaluation.

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