Arm Holdings stock may be fully valued after going public, according to Needham. The firm initiated coverage coverage of the semiconductor and software stock with a hold rating, but declined to offer a price target. Arm stock climbed as much as 25% after its initial public offering on Thursday , which valued the company at roughly $60 billion. Shares climbed another 5.5% in premarket trading Friday. ARM 5D mountain Arm Holdings stock. But analyst Charles Shi says the blowout IPO signals that the “valuation looks full for Arm in a post-smartphone era.” While Arm has found previous success with smartphones thanks to a “tightly controlled ecosystem,” the company could have trouble adding to growth elsewhere as the landscape shifts toward high-performance computing, Shi says. “In new growth areas, however, not only do viable alternatives to Arm exist, but ecosystem control often resides in the hands of others,” Shi said. “We think Arm can grow by capturing greater value from smartphones, but not enough to support upside from the stock’s IPO valuation.” — CNBC’s Michael Bloom contributed to this report.
