What Is The ARM IPO?
This article reviews a list of penny stocks to watch after the much anticipated ARM IPO. But before we dive into that watch list, let’s explain what the ARM IPO is and why it might influence certain stocks.
The ARM IPO is a highly anticipated public offering of stock from Arm. The chip design company supplies tech to companies like Nvidia and Apple. The ARM IPO was priced at $51 per share, and Arm Holdings (NASDAQ: ARM) began trading under the ticker symbol “ARM” on September 14th.
Other than Apple and Nvidia, ARM also caters to Google, Samsung, AMD, Intel, and Taiwan Semi. These same customers also expressed interest in being part of the offering. The latest ARM IPO comes seven years after it was taken private in a $32 billion deal by SoftBank. In 2020, SoftBank signed a $40 billion transaction with Nvidia, which was later abandoned in the face of regulatory hurdles.
With chip demand getting a boost from a surge in AI tech development, some see ARM stock as well-positioned this year. Meanwhile, there is also a case against it as its sales have seemingly slumped due to lower smartphone sales. Whichever side you’re on, it’s worth noting that Thursday’s ARM IPO has woken up the risk-on appetite for some traders.
Hot Penny Stocks To Watch
Is ARM a penny stock? Far from it, with trading levels above $60 at times on Thursday. However, it has caused a stir in higher-risk assets and shined a brighter light on the IPO market overall. With this, some traders are turning their attention to higher volatility stocks in sectors like tech. In this article, we look into a handful to see if there are any recent or upcoming milestones to consider, while sympathy sentiment from ARM stock could also play a role.
- Qudian (NYSE: QD)
- WiSA Technologies Inc. (NASDAQ: WISA)
- Rigetti Computing Inc. (NASDAQ: RGTI)
- GrafTech International (NYSE: EAF)
This year has been a significant one for Qudian regarding share price. The penny stock began trading in January at around 90 cents. Since then, it has climbed as high as $2.54. Recent earnings results put a blip on the chart via a multi-day sell-off that took shares to lows of $1.64. Qudian reported lower earnings per share and sales than the prior year’s second quarter. Its EPS loss was 5 cents compared to 3 cents, and sales were down from $15.74 million to just $1.53 million.
Min Luo, Founder, Chairman, and Chief Executive Officer of Qudian, said, “We continued to execute our business transition and establish our new last-mile delivery business while maintaining a healthy balance sheet by pursuing efficient cash management…Our new last-mile delivery business has made steady progress since we launched it on a trial basis in December 2022 and started to achieve initial shape and scale in the second quarter of 2023 in Australia under the name of “Fast Horse.”
Since the earnings report sell-off, QD stock has managed to rebound strongly. This week, the price has spiked back above the $2 mark.
WiSA Technologies Inc. (WISA)
Tech stocks have gotten some attention thanks to the ARM IPO this week. WiSA Technologies is one of the penny stocks to watch amid this surge. The company provides immersive wireless sound technology for smart devices and home entertainment systems. Unlike Qudian, WiSA reported a more substantial earnings performance for the second quarter in terms of EPS. However, a sales miss left some mixed sentiment in the market.
Earlier this month, a subsidiary of the company, WiSA Association, entered the CEDIA Expos with a new technology based on a wireless multichannel platform designed for soundbars and speakers. While that news didn’t seem to awaken the stock market bulls, the company attended the HC Wainwright Global Investment Conference this week. In connection with the event, WISA stock appears to have made a stronger rebound.
Some specific comments of note from the Q2 update came from CEO Brett Moyer. He explained, “We continue to explore strategic opportunities, and the team just completed two weeks of discussions in Asia focused particularly on ways to leverage the value of our intellectual property…Concurrently, progress is being made toward a definitive agreement to acquire Comhear and expand our IP portfolio…For the first time since May of 2022, we are seeing consumers return to purchasing audio products. Our unaudited consumer audio product sales in July 2023 have essentially matched Q2 2023 sales.”
Rigetti Computing Inc. (RGTI)
Shares of Rigetti Computing stock continued holding their overall 2023 uptrend this week. The penny stock saw a sell-off late last month and one of the catalysts in play is its recent earnings.
Rigetti Computing posted stronger-than-expected results in its recent quarterly earnings report. It exceeded analyst estimates for both revenue and earnings per share. In response, analysts at Benchmark and Needham reconsidered their outlook on RGTI stock. Benchmark upgraded its rating on Rigetti shares to a Buy. Needham initiated coverage with a Buy rating.
Both firms set bullish price targets on the quantum computing company’s stock. Benchmark forecasts $4 per share, and Needham predicts $3 per share. The upgraded recommendations and positive price outlooks highlight analysts’ optimism for Rigetti following the company’s upbeat quarterly performance.
“After having launched the Ankaa-1 system internally, we are excited to have our longtime partner, Riverlane, as the first external partner using the system to work on improving error correction techniques on our new architecture,” said Dr. Subodh Kulkarni, Rigetti Chief Executive Officer. “We also look forward to making Ankaa-2, our most innovative system to date, available to the general public in Q4 of this year.”
The quantum computing company has gained interest as the sector grows in popularity. Rigetti is expecting to launch its Ankaa-1 quantum processor to customers in mid-2023. It was also awarded a US Patent titled “Parametrically activated quantum logic gates,” helping to add to the positive sentiment in the stock market. Right before the end of July, Rigetti also announced a collaboration deal with ADIA Lab to develop quantum machine learning solutions for resolving certain challenges in quantitative finance.
GrafTech International (EAF)
GrafTech recently put in new 52-week lows of $3.32 earlier this week. The tech company was slipping lower after a big blow from its latest earnings. The graphite electrode manufacturing company posted an EPS miss and a sales beat for its second quarter 2023. But the greater-than-expected loss and lower-than-anticipated guidance made its mark on the penny stock.
Shares of EAF stock tumbled from over $5 to these latest lows. The company set expectations for the remainder of the year, saying, “While we continue to move past the Monterrey suspension-driven impact on our sales volume, we expect demand for graphite electrodes in the second half of 2023 will be tempered by ongoing softness in the commercial environment. As a result, we now estimate our sales volume for the full year of 2023 will be in the range of 95 thousand MT to 105 thousand MT, as compared to our previous estimate of 100 thousand MT to 115 thousand MT. Sales volume in the third quarter of 2023 is expected to be broadly in line with sales volume for the second quarter of 2023.”
EAF stock is another on the list of penny stocks to watch as shares rebound another 8% on Thursday.