Arm believes that the wave of AI will bring huge business opportunities

Previously, Arm had submitted its Initial Public Offering (IPO) application to the NASDAQ in the United States, with aspirations to trade under the ticker “ARM”. Its valuation is anticipated to hover between 50 and 55 billion USD, with the official listing expected on September 14th.

According to reports from the Financial Times, during recent investor roadshows, Arm’s senior executives expressed a belief that the burgeoning global wave of Artificial Intelligence (AI) presents an unparalleled growth opportunity. They project a 20% revenue growth by the fiscal year ending in March 2025, surpassing analysts’ predictions.

Due to a deceleration in the smartphone market, Arm experienced a decline in profits in the latest quarter, leading many investors to express concerns about its future revenue projections. This, in turn, impacted Arm’s valuation. It remains uncertain if Arm has strategies in place to substantially elevate its revenue. Even with modifications to its patent fee structure and cost adjustments, the implications would only reflect in their financials after some time. Recently, Arm renewed its licensing agreement with Apple, extending it until 2040. However, this theoretically wouldn’t result in a significant surge in licensing fees.

SoftBank Group acquired Arm in 2016 for 32 billion USD and had intentions to sell it to NVIDIA for approximately 40 billion USD in 2020. However, this transaction was halted by regulatory bodies. Over the past few years, SoftBank Group’s operational performance has been less than stellar. Despite Arm being one of the top entities in the industry, it hasn’t yielded significant returns for SoftBank. Consequently, enhancing Arm’s performance has emerged as one of SoftBank Group’s pressing concerns.