Arm is trading at a premium to Nvidia after IPO pop even though it’s a ‘no-growth company’

For investors, the critical difference between Nvidia and Arm is the growth rate. Nvidia just reported a doubling of revenue in the latest quarter and forecast expansion of 170% this period, as all the major cloud companies ramp up spending on AI chips. Arm’s revenue, by contrast, shrank slightly in the last quarter.

“There’s no way you can justify a P/E ratio of over 100 for a no-growth company,” commented Cordell Eminent Scholar Jay Ritter in the story from CNBC.