The stock is priced at 38 times revenue projected over the next 12 months, after jumping more than 90% since the chip designer gave a bullish sales forecast that it attributed in part to artificial intelligence spending. That’s far more expensive than any stock in the Nasdaq 100 or the S&P 500, including Nvidia Corp., according to data compiled by Bloomberg.
The stock fell about 10% on Tuesday, but it is coming off a four-day surge of more than 100%.
The magnitude of the rally in Arm’s shares — to now nearly triple the IPO price — has captivated traders, who have watched the stock add the equivalent of PayPal Holdings Inc.’s market value in the past three days. Despite the rapid gains, the surge doesn’t appear to be driven by short covering with bets against the stock weighing in at just 1% of shares available to trade, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.
