Why Arm Holdings Stock Was Moving Higher Today
BNP Paribas upgraded its rating on Arm Holdings.
The bank sees it benefiting from a push into custom chips.
The stock remains expensive, but its future is promising.
10 stocks we like better than Arm Holdings ›
Shares of Arm Holdings (NASDAQ: ARM) were climbing today as one Wall Street analyst took a brighter view of the company.
In a note this morning, BNP Paribas raised its rating on the CPU architecture specialist from neutral to outperform, and lifted its price target from $110 all the way up to $210.
As a result, the stock was up 4.2% as of 1:11 p.m. ET.
Arm moves into ASICs
The bank upgraded the stock as analyst David O'Connor said that its new ASIC (application-specific integrated circuit) business, which refers to custom chips, could double the company's operating profit, even if it only captured 7% of the addressable market.
O'Connor also said that there's still "significant upside" in the stock, as the ASIC product line is not being fully valued.
By nearly doubling the price target on Arm, the analyst is giving the stock an implied upside of 40%.
Arm is moving further into custom chips, scoring Meta Platforms as its first major customer in February. The move represents a shift from the company's historical business model of licensing its architecture designs, but it also exposes it to a large market, and investors have priced in growth as the company trades at a high valuation.
Can Arm keep climbing?
Arm stock is expensive, trading at a price-to-sales ratio of 38, but the stock deserves a premium. Not only is it delivering strong growth and impressive margins, but it has a resilient business model of licensing its battery-efficient CPU technology, which has given the company a competitive advantage in markets like smartphones and, increasingly, data centers.
Additionally, its combination of revenue streams from licensing and royalties also ensures it has a long pipeline of revenue. The business is in great shape, though Arm's growth will be tested by its valuation.
Should you invest $1,000 in Arm Holdings right now?
Before you buy stock in Arm Holdings, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arm Holdings wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $679,653!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,308!*
Now, it's worth noting Stock Advisor's total average return is 1,060% — a market-crushing outperformance compared to 179% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 15, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
31 minutes ago
- Globe and Mail
Dollar General vs. Dollar Tree: Which Discount Stock Wins the Value Game?
Key Points Dollar General struggled with macro headwinds over the past few years. Dollar Tree's divestment of Family Dollar could represent a fresh start. The pricier stock could actually be the better value. 10 stocks we like better than Dollar General › Dollar General (NYSE: DG) and Dollar Tree (NASDAQ: DLTR), the two largest dollar stores in America, both survived the retail apocalypse which wiped out many other retailers over the past decade. They kept opening new stores even as other retailers pulled back, and they countered Amazon and Walmart by selling cheaper products. That resilience made them reliable recession-resistant investments. But over the past three years, Dollar General's stock plunged more than 50% as Dollar Tree's stock dropped over 30%. Let's see why these two stocks sank -- and if either one is a better value play right now. The differences between Dollar General and Dollar Tree Dollar General mainly opens its stores in rural areas which haven't been saturated by superstores. It doesn't actually sell everything for a dollar, but it tries to sell its products at much lower prices than its competitors. It generates most of its revenue in the U.S., but it expanded into Mexico with its Mi Súper Dollar General stores in 2022. From fiscal 2021 and fiscal 2024 (which ended Jan. 31, 2025), Dollar General's number of year-end stores increased from 18,130 to 20,594. For fiscal 2025, it plans to open approximately 575 new stores in the U.S. and up to 15 new stores in Mexico. Dollar Tree focuses on urban and suburban markets, and it tries to wedge its stores between lower income neighborhoods and superstores like Walmart. It originally sold all of its products for $1, but it raised its prices over the past four years to counter inflation and sell a broader range of products. It acquired its chief competitor Family Dollar in 2015, but it finally sold the struggling banner after a decade of sluggish sales this year. From fiscal 2021 to fiscal 2024 (which ended Feb. 1, 2025), Dollar Tree's number of year-end stores (including Family Dollar) grew from 15,115 to 16,774. But in fiscal 2025, its store count will decline as it divests its Family Dollar stores. At the end of the first quarter of 2025, its Dollar Tree segment operated 9,016 stores. What challenges do the dollar stores face? Dollar General and Dollar Tree both grew their same-store sales over the past three years. Data source: Company earnings reports. *Excluding Family Dollar. Dollar General's same-store sales slowed in fiscal 2023 as it grappled with inflationary headwinds for consumer spending (especially among lower income consumers), theft and inventory shrinkage issues, and cost-cutting measures, which caused operational challenges. But in fiscal 2024, its growth accelerated again as it closed some weaker stores, prioritized operational improvements over immediate cost-cutting strategies, and opened more Popshelf concept stores to sell a broader range of higher-margin, non-essential goods. For fiscal 2025, it expects its same-store sales to rise 1.5% to 2.5% as it continues to open more Popshelf stores, adds gas stations to more of its rural Dollar General stores, remodels its older locations, and continues to open new stores in more promising markets. It expects its diluted EPS, which plunged 32% in fiscal 2024, to rise 2% to 14% in fiscal 2025. Analysts expect its EPS to grow 12% for the year, even as the unpredictable tariffs squeeze its near-term margins. Dollar Tree's same-store sales growth decelerated in fiscal 2023 and 2024 as it grappled with inflation, weak consumer spending, bloated inventories, and theft. Its decision to broaden its price range alienated some of its customers, and its "combo strategy" of merging some of its Dollar Tree and Family Dollar banners didn't halt that slowdown. But for fiscal 2025, Dollar Tree sees its same-store sales rising 3% to 5%. It expects that acceleration to be driven by its ongoing conversion of its stores to its newer multi-price "3.0 format" (with $1.25-$7.00 tiers) to attract higher income customers. The divestment of Family Dollar should also free up more cash to strengthen its main banner. Dollar Tree expects adjusted EPS from continuing operations, which dipped 12% in fiscal 2024, to rise 1% to 11% in fiscal 2025. Analysts expect its adjusted EPS to grow 6%. Which dollar store stock is the better value right now? Dollar General trades at 20 times forward earnings and pays a forward dividend yield of 2.2%. Dollar Tree trades at 21 times forward earnings but doesn't pay a dividend. Dollar General might be the cheaper stock, but I think Dollar Tree's divestment of Family Dollar, its stronger same-store sales growth, and it's clearer plans for broadening its reach among higher-income consumers make it the more compelling investment. Dollar General's focus on rural areas limits its ability to attract more affluent customers, while its expansion of Popshelf could run into a lot of competition from similar retailers like Five Below. Should you invest $1,000 in Dollar General right now? Before you buy stock in Dollar General, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dollar General wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 28, 2025
Globe and Mail
an hour ago
- Globe and Mail
Bull of the Day: Amazon (AMZN)
Amazon AMZN stock has seen a sharp rebound in the last three months, surging more than +20% to help lead the unprecedented recovery among the broader indexes. That said, with tariff uncertainty starting to become somewhat benign in regard to affecting the stock market, Amazon stock looks poised to keep soaring ahead of its Q2 results on Thursday, July 31. Keeping this in mind, let's take a look at Amazon's Q2 growth expectations and a few catalysts that could keep lifting AMZN shares from here. Amazon's Q2 Expectations & The Zacks ESP As a brief preview, Amazon's Q2 sales are thought to have increased 9% to $162.28 billion compared to $147.98 billion a year ago. On the bottom line, Amazon's Q2 earnings are expected to be up 8% to $1.33 per share from EPS of $1.23 in the prior period. Notably, Amazon has exceeded the Zacks EPS Consensus for 10 consecutive quarters with a very impressive average earnings surprise of 20.68% in its last four quarterly reports. More intriguing, the Zacks ESP (Expected Surprise Prediction) indicates Amazon could keep this compelling streak of beating earnings expectations going with the Most Accurate and recent estimate among Wall Street analysts having Q2 EPS pegged at $1.42 and 7% above the underlying Zacks Consensus (Current Qtr below). Amazon 'Prime Week' Takes Off As reason to believe Amazon could offer very favorable guidance for Q3, the e-commerce giant's Prime Day event has been stretched to four days (July 8-11) and recently shattered previous records. Being Amazon's largest sales event on record, U.S. online sales for what could now be deemed as "Prime Week" are thought to have hit $24.1 billion. It's noteworthy that AI-driven advertising was a large contributer. To that point, Adobe Analytics reported a 3,300% surge in AI-driven traffic during "Prime Week" after analyzing over a trillion visits to retail sites. This mind-blowing spike refers to traffic generated from generative AI tools like Amazon's AI-powered shopping assistant 'Rufus' and its revamped next-generation voice assistant 'Alexa+'. Key Points of Amazon's AI Expansion In the grand scheme of things, Amazon is focused on using AI to supercharge its cloud division, Amazon Web Services (AWS), which is still the largest cloud service ahead of Microsoft's MSFT Azure and Alphabet's GOOGL Google Cloud. 1. Nova models: Amazon's proprietary generative and agentic AI models, integrated across Alexa+, shopping (Rufus), and AWS services. 2. Custom AI chips: Continued development of its own custom AI chips, including the Trainium 2 and the upcoming Trainium 3, designed to outperform traditional GPUs in cost and efficiency. 3. Amazon Bedrock: A marketplace for foundational large language models (LLMs) from leaders like Anthropic, Meta Platforms META, Mistral, and others, allowing developers to build AI apps without managing infrastructure. 4. Data Center Buildouts & Sustainability Push: New AI-ready data centers in Pennsylvania and North Carolina that are collocated with nuclear power facilities to complement investments in small modular reactors (SMRs) that power AI workloads with carbon-free electricity. Amazon's EPS Growth & Revisions Correlating with the rebound in Amazon stock, EPS revisions have continued to trend higher in the last 60 days for fiscal 2025 and FY26. Amazon's annual earnings are now expected to increase 13% this year and are projected to spike another 16% in FY26 to $7.28 per share. Image Source: Zacks Investment Research Furthermore, following the pandemic, FY26 EPS projections would reflect 248% growth with Amazon's post-split adjusted earnings being the equivalent of $2.09 a share in 2020. (Amazon did a 20-1 Stock Split in June of 2022). Conclusion & Final Thoughts As a reminder that Amazon's stock previously traded over $2000 a share before its most recent stock split, now appears to be an ideal time to buy AMZN before it gets more expensive. At the moment, the Average Zacks Price Target for Amazon stock is $254, suggesting 10% upside from current levels. However, it would be no surprise if this consensus price target is eventually lifted toward $300 or higher, considering the tech giant's businesses are starting to be streamlined by AI. Higher. Faster. Sooner. Buy These Stocks Now A small number of stocks are primed for a breakout, and you have a chance to get in before they take off. At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We've combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month. You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days. Download the report free now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Alphabet Inc. (GOOGL): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
CTV News
an hour ago
- CTV News
Free trade carveouts key in potential deal between U.S. and Canada: business groups
Business leaders and academics say they hope to see Canada and the U.S. maintain free trade protections for most goods once an agreement is reached, even if the negotiations can't stave off certain sectoral tariffs. Canada's Prime Minister Mark Carney, right, greets President Donald Trump during the official welcome of the G7 Summit, Monday, June 16, 2025, in Kananaskis, Canada. (AP Photo/Mark Schiefelbein) Business leaders and academics say they hope to see Canada and the U.S. maintain free trade protections for most goods once an agreement is reached, even if the negotiations can't stave off certain sectoral tariffs. It's unclear if the two countries will stick to the Aug. 1 deadline for wrapping up talks, as Prime Minister Mark Carney said Monday negotiations were in an 'intense phase' but U.S. President Donald Trump told reporters last week that Canada wasn't a priority for his administration. Whether a deal is announced Friday or later, Canadian Federation of Independent Business president Dan Kelly says his organization's members feel 'a good chunk' of trade must remain tariff-free in order for talks to be considered successful. He says it wouldn't be a win for Canada if the trade agreement ends up looking similar to the deal struck by the U.S. with the European Union on Sunday. That framework imposes a 15 per cent tariff on most goods imported into the U.S., including European automobiles, and no carveouts for key products like pharmaceuticals and steel. Kelly says Canadian business leaders will also be watching to find out what levies will remain on imports from the U.S., noting Canada's ongoing retaliatory tariffs 'are really crippling small businesses even more than the U.S. tariffs.' This report by The Canadian Press was first published July 29, 2025. Sammy Hudes, The Canadian Press
