UK chip designer ARM Holdings has seen its stock market value nearly double as investors continue to bet big on AI.

The company, which designs chips that power the majority of smartphones globally, was made public again last year after being taken private by Japan’s Softbank in 2016.

Arm has seen its shares increase by more than 98% since its earnings announcement last week.

The increase has put the Cambridge-based chip designer ahead of HSBC and Unilever as the fourth most valuable UK-headquartered company.

Arm’s stock market value has now reached a record $14bn, almost tripling since its initial public offering last September.

Ekaterina Almasque, general partner at early stage European venture capital firm OpenOcean, told Verdict that Arm’s meteoric rise in share value “reaffirms the pivotal role of processing power in the AI boom.”

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By GlobalData

“It’s not a standalone event but rather an indication of the accelerating demand for AI infrastructure,” Almasque told Verdict, “the market’s confidence in Arm underscores the significance of computational access, especially for budding startups in the deep tech sector.”

The UK chip designer’s valuation increase comes alongside NVIDIA’s, which has also seen its shares soar since last year due to the heavy demand of AI chips.

Although Arm’s technology is not strictly being made for AI purposes, Nvidia has been using its central processing units to go alongside its AI-powered chips.

Nvidia has become one of the world’s most valuable publicly-traded companies, with a market value of around $1.8trn.

Despite the US chip giant joining the one-trillion-dollar club of companies in 2023, research and analysis company GlobalData predicts that it will become less of a dominant force in the industry in 2024.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, registering a compound annual growth rate (GAGR) of 35% between 2022 and 2030.

In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027 at a CAGR of 80%.