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♟ The Indirect Winner From ARM's Big IPO

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"ARM's success could unlock a fresh string of IPO opportunities... and Goldman Sachs stands to benefit."

Bryan Bottarelli, Head Trade Tactician, Monument Traders Alliance

Bryan Bottarelli

As I'm sure you heard...

Chip designer Arm Holdings (ARM) went public on the Nasdaq on Thursday, September 14 - and it was a big success.

ARM's customers include some of the biggest names in technology, including Apple... which is why the stock closed 25% higher on its first day of trading.

That's a big deal. It gave the chipmaker the distinction of being the most high-profile IPO on the Nasdaq since 2021.

Last year, the IPO market was all but nonexistent.

Only 71 companies went public in 2022...

Which was a steep drop from the 397 that went public in 2021.

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A big, successful tech IPO could signal the start of a new wave of IPOs hitting Wall Street.

And if that happens, Goldman Sachs (GS) stands to benefit.

Goldman Sachs Poised to Challenge Recent Highs
 

From 2021 to 2022, Goldman's equity underwriting revenues fell 83%.

But ARM's IPO served as a "much-needed win" for Goldman, according to Barron's. And ARM's success could lead other companies to believe now is the right time to hit the Street... which could unlock a fresh string of IPO opportunities.

Mark Roberts, the managing director of Blueshirt Group, told Yahoo Finance on Thursday, "This is a great first step to reopening what has been sort of an 18-month drought of IPOs in the U.S. tech market."

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YOUR ACTION PLAN

The success of Arm Holdings' (Nasdaq: ARM) IPO could soon pave the way for more companies to feel comfortable going public and to use Goldman Sachs (NYSE: GS) as their key underwriter - which Instacart, Birkenstock and Klaviyo have also recently done. That could be a trigger for GS to revisit its recent highs at $355 and above.

To see exactly how I'm playing this exciting development in the tech sector, I invite you to join me in The War Room. Over the past three weeks, I've closed three triple-digit overnight winners, including a 133.06% return on an Oracle (NYSE: ORCL) earnings strangle.

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MONDAY MARKET MINUTE

  • The Fed's Upcoming Moves. This week's Federal Open Market Committee meeting appears to be a non-event. CME Group's FedWatch Tool, which evaluates pricing in the fed funds futures market, is indicating there's a 99% chance that the Federal Reserve stays put with respect to rates on Wednesday.
  • Boeing Layover. BA basically flatlined last week, which I believe was partially caused by Delta joining several other airlines in cutting profit estimates as a result of higher costs. American, Spirit, Frontier and Southwest had previously reduced their estimates. While this does not have a direct impact on BA, I think the sector's weakness has put a lid on BA's upside.
  • A Shift in Overall Trading Tone. Investors are paying more attention to value and small cap names right now, which works well for longer-term positions but indicates investors are on edge.
  • GM Hinges on Auto Workers' Deal. As the United Auto Workers strike continues, let's see whether it will finally start to impact the shares of General Motors. If GM and the other major automakers end up agreeing to larger wage hikes than they want, it could impact the company's profitability, which would be viewed negatively on Wall Street.

 

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