Arm Holdings rallies strongly after earnings

(Bloomberg) — Arm Holdings Plc is extending a big rally in the wake of last week’s blockbuster earnings report that showed artificial intelligence spending was boosting sales.

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The chip designer’s shares surged as much as 42% on Monday, more than six times the average over the past three months. The advance pushed the stock’s gains to more than 100% in the three trading sessions since Arm’s results were released after the market closed on Feb. 7.

“What you’re seeing here is a feeding frenzy for anything AI-related,” said Dennis Dick, trader at Triple D Trading. “We’ve already seen this kind of thing with Nvidia, but now Arm is being put in the same classification. It’s not a pure AI game, it does other things, but it has that division, and that’s what’s driving up the price here. It’s just about the AI ​​boom.”

Arm is benefiting from advances in smartphone technology, which is helping fuel growth and profitability. Last week, Arm forecast revenue of $850 million to $900 million for the March quarter, far above the average analyst estimate of $778 million. Chief Executive Officer René Haas said the opportunities presented by AI are still in their early stages.

So far, Nvidia Corp. has been the biggest beneficiary of AI-driven demand for computing power. The chip maker’s shares more than tripled last year amid a surge in revenue and profits related to sales of its so-called AI accelerator chips. Nvidia’s rally has continued this year, sending the stock up 49% and pushing its market value past Inc. to $1.82 trillion.

Arm has nearly tripled since its September debut and now has a market cap of more than $140 billion, making it more valuable than Boeing Co and…

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