Arm is planning on IPOing (again) later this year and is expected to become the biggest IPO of 2023.
👉 Background: Arm is the UK-based chip designer that launched in the early 1990's. And Arm's tech happens to be in 99% of all smartphones. It was previously a public company but was acquired by Softbank in 2016.
👉 What happened: Now, Arm is planning on IPOing (again) later this year and is expected to become the biggest IPO of 2023. In fact, they're hoping to IPO at a valuation between $60 - $70 billion USD.
👉 What else: And while they already dominate the "chip design" market, Arm is now promoting AI computing as their future.
💡Investors face a major challenge in accurately valuing companies that are at the forefront of new technologies. And Arm's upcoming IPO is a prime example.
💡Arm recorded just under $2.7 billion USD in revenue last financial year. If you compared its revenue against its competitors revenue, it would imply a valuation of around $32 billion - $43 billion USD... much less than what they're gunning for.
💡But many investors are attracted to its AI potential to generate more significant revenue. But how do you value that today? In any case, this 'potential' is what might could make Arm's IPO the biggest in the US in 2023... And Softbank could become a very very very happy investor.
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