Interested in Arm Holdings? These 2 Chip Stocks Are Growing Even Faster and Are More Reasonably Valued.
The long-awaited initial public offering (IPO) of semiconductor maker Arm Holdings (NASDAQ: ARM) finally happened, and it's a doozy. The licensor of chip architecture made its publicly traded debut in mid-September with a hefty market capitalization of over $60 billion, before falling closer to $50 billion in the days following.
Arm is a powerful company. Its chip designs have been an integral part of the rise of mobile computing over the last two decades, tapped by a diverse ecosystem of big customers including Apple (NASDAQ: AAPL), Qualcomm (NASDAQ: QCOM), and Nvidia (NASDAQ: NVDA). But valuation is a serious concern. There are two chip stocks more reasonably valued that investors might like to know about instead.
The first hint that Arm isn't a buy for most retail investors is the very nature of the IPO. Typically, a business sells shares to investors to raise cash to fund expansion. But that's not what happened to Arm. Back in 2016, Japanese investment conglomerate SoftBank Group acquired Arm. SoftBank is the company that just sold Arm shares, raising nearly $4.9 billion in cash for itself -- not for Arm. SoftBank still owns about 90% of Arm, so it could continue to sell shares in the years to come to raise more cash.
Source Fool.com
SoftBank Group Stock
The community is currently still undecided about SoftBank Group with 1 Buy predictions and 0 Sell predictions.
On the other hand, the target price of 50 € is below the current price of 52.49 € for SoftBank Group, so the potential is actually -4.74%.
