(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 Amazon.com 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…