Arm is trading at a premium to Nvidia after IPO pop even though it's a ‘no-growth company'

. That leaves a small sliver of shares to be passed between institutional and retail investors and traders, though volume was high enough on Thursday that Arm was the fifth-most actively traded stock on the Nasdaq, with 126.58 million shares trading hands., Arm made the case that its technology"will be central to this transition" to AI-based computing. Arm's designs are currently in almost every smartphone on the market, as well as in electric cars and data centers.

"We've got significant growth in the cloud data center and in automotive," Arm CEO Rene Haas told CNBC's David Faber on Thursday."And then with AI, AI runs on Arm. It's hard to find an AI device today that isn't Arm-based." Arm said in its IPO filing that it expects the addressable market for products with its designs to reach $246.6 billion by 2025, up from $202.5 billion last year. That's only 6.8% annual growth, so Arm's path to greater prosperity has to be through market share gains and improved economics.

"We expect that the cost and complexity of chip design will continue to increase, and that we will be able to contribute a greater proportion of the technology included in each chip, resulting in our royalties comprising a greater proportion of each chip's total value," the prospectus says., founding partner of Venture Science, said his investment firm indicated interest in the IPO but didn't receive an allocation.

For fiscal 2023, Arm's gross margin — the percentage of profit left after accounting for the costs of good sold — was 96%, because the company makes much of its money from royalties and isn't delivering hardware. Nvidia's gross margin in the latest quarter was 70%, and that's after shooting up from under 44% a year earlier. Intel and

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