Arm initiated with a Hold at Needham

Needham initiated coverage of Arm with a Hold rating. Arm’s architecture is “a foundation of smartphones,” but the firm sees the world “entering a post-smartphone era” as high-performance computing and IoT expected to lead the next phase of semiconductor growth. In new growth areas “not only do viable alternatives to Arm exist, but ecosystem control often resides in the hands of others,” says the firm, which thinks Arm growth from capturing greater value from smartphones will not be enough to support upside from the stock’s IPO valuation.