Arm (ARM), the chip design firm that supplies core technology to companies including Apple and Nvidia, made a blockbuster debut on the Nasdaq MarketSite in New York on Sep 14, 2023. The chip giant Arm raised $4.87 billion in this year's largest IPO.

Priced at $51 per share during its IPO, Arm's stock opened at $56.10 just past midday in New York. The company witnessed a sharp surge as trading progressed, closing the day at a robust 25% above the initial offering price (read: Time for Semiconductor ETFs On Spike in July Sales?).

The company is trading under the symbol “ARM.” The U.K.-based company has listed at least 95.5 million American depository shares on the Nasdaq, and SoftBank, its current owner, will control about 90% of the company’s outstanding shares.

During the ongoing AI boom, Arm Holdings Inc. garnered considerable attention on its trading debut, attracting significant interest from retail investors. According to data from Fidelity's trading platform, the chip designer dominated in terms of buy orders on Thursday, amassing more than 20,000 purchase requests. This surge in demand clearly outshone well-known retail favorites like Tesla Inc. and Nvidia Corp, as quoted on Bloomberg.

Time for Semiconductor ETFs?

Just as a rising tide lifts all boats, the successful Arm IPO may boost the entire semiconductor space. The growing interest around stock serves as evidence of the enthusiasm of smaller traders to invest in the booming AI sector.

Notably, in late 2020, Nvidia agreed to buy Arm for $40 billion, in what could have been the semiconductor sector's largest-ever merger. But the deal failed to materialize in early 2022 due to regulatory issues.

Per an article published on axios.com, “chip demand is shifting toward AI applications, and Arm could be viewed as a complimentary play to Nvidia, a former merger partner and current market darling.” Hence, the Arm-Nvidia pair could give a much-needed support to the semiconductor space which is currently going through a rough patch.

After all, as inflation is showing signs of easing and Covid-led supply chain issues ease, the semiconductor market is poised for resurgence. The expanding influence of transformative technologies like AI, the Internet of Things, and machine learning sustains semiconductor demand. The ever-increasing global adoption of consumer electronics remains a critical driver.

Moreover, semiconductor ETFs have cheaper valuation in the tech space. Against this backdrop, below we highlight a few semiconductor ETFs that could be tapped now.

ETFs in Focus

VanEck Semiconductor ETF (SMH Quick QuoteSMH - Free Report) – Up 2.9% Past Month; P/E: 20.35X

Invesco PHLX Semiconductor ETF (SOXQ Quick QuoteSOXQ - Free Report) – Up 1.5% Past Month; P/E: 15.08X

First Trust Nasdaq Semiconductor ETF (FTXL Quick QuoteFTXL - Free Report) – Up 1.4% Past Month; P/E: 18.91X

iShares Semiconductor ETF (SOXX Quick QuoteSOXX - Free Report) – Up 1.1% Past Month; P/E: 20.34X