A big test for initial public offerings.

From Marketplace in Los Angeles, I'm Novosafo and for David Brancaccio.

If there's one thing we learned during the pandemic, it's that computer chips are essential,

and a company that designs some of the technology that goes into those chips, it's called ARM,

is getting ready for its initial public offering later this year.

Thanks to a new regulatory filing, we know ARM is hoping to raise about $4.8 billion.

That would make it the largest IPO since 2021.

In the last couple of years, the appetite for initial public offerings has eased significantly,

and ARM could potentially change that.

Here's Marketplace's Justin Ho.

Ever since early last year, companies have found plenty of reasons to avoid going public.

Russia's invasion of Ukraine, rising interest rates, a possible recession.

All that uncertainty hasn't necessarily gone away, but investors have had time to absorb it.

It's not as much of a shock as it was last year.

That's Avery Spear with Renaissance Capital.

As a result, Spear says the IPO market has started to thaw.

We have seen more $100 million plus IPOs this year than last, and the years larger she wears have done quite well.

ARM is hoping to raise billions with its IPO, which means it'll have to attract a lot of investors.

Steve Kaplan, with the University of Chicago, says if the company stock rises after it starts trading,

that gives investors some confidence that there's investor demand, that the company's okay,

and it potentially leads to more IPOs.

But if the IPO goes poorly, other companies might decide to stay private.

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