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Shares of Arm Holdings (NASDAQ: ARM) have given up most of their IPO gains as investors cool on the company's long-term prospects. While Arm-based chips are dominant in the smartphone, consumer electronics, and embedded markets, Arm's growth will need to be driven by markets where the company has less of a presence. The cloud data center is one such market.
Wall Street has become particularly bullish about tech stocks this year, with advances in artificial intelligence (AI) sending shares in many companies skyrocketing. The industry has massive potential, projected to expand at a compound annual growth rate of 37% through 2030 per Grand View Research. Nvidia (NASDAQ: NVDA) shares have soared 180% year to date, benefiting from Nvidia becoming the go-to for AI-minded companies seeking chips.
Not too long ago, cryptocurrencies looked like one of the best investment opportunities, as bulls thought the digital system could eventually replace traditional payment methods. Investors seem increasingly apprehensive about cryptocurrencies, with Bitcoin's price down 4% in the last six months and Ethereum's down 10%. Meanwhile, tech stocks have been on the rise.