Latest news with #ArmHoldings
Globe and Mail
5 days ago
- Business
- Globe and Mail
2 AI Growth Stocks That Could Help Set You Up for Life
The artificial intelligence (AI) market has grown like a weed over the past decade. That rapid expansion -- which was fueled by more sophisticated cloud computing services, large language models, and generative AI applications -- lit a blazing fire under some high-growth tech stocks. The most obvious winners are Nvidia, the world's top producer of discrete graphics processing units (GPUs) for processing AI tasks; and Microsoft, which acquired a big stake in OpenAI and integrated the start-up's AI tools into its own services. But there are still plenty of other under-the-radar AI growth plays that might have more upside potential. Let's look at two of them: Credo Technology (NASDAQ: CRDO) and Arm Holdings (NASDAQ: ARM). Credo Technology Credo, which went public in 2022, sells a wide range of high-speed connectivity solutions for the data center, cloud, and AI markets. Its core products include data transfer chips, digital signal processors, line card components, and active electric cables for data centers. From fiscal 2022 to fiscal 2025 (which ended this May), Credo's revenue grew at a compound annual growth rate (CAGR) of 60%. It also turned profitable for the first time in fiscal 2025. Credo attributed that growth to the rapid expansion of the cloud and AI markets, which drove its hyperscale customers to aggressively upgrade their data center infrastructure. Its biggest customer -- widely believed to be Microsoft -- accounted for 39% of its revenue in fiscal 2024. That customer concentration isn't ideal, but it also isn't surprising considering how much Microsoft is prioritizing the expansion of its cloud and AI ecosystems. Its other major customers include Amazon and Tesla. From fiscal 2025 to fiscal 2027, analysts expect Credo's revenue to rise at a CAGR of 47% as its earnings per share (EPS) increase at a CAGR of 113%. That rapid growth could be driven by the continued expansion of the AI market, and a shift toward higher-speed ethernet connections that will spur demand for its new optical modules. There's also rising demand for its "chiplet" designs, which are more modular, customizable, and scalable than monolithic system on chips (SoCs), which merge together multiple chips on a single die. It isn't cheap at 64 times this year's earnings, but it could have plenty of room to run over the next few decades. Arm Holdings Arm is a U.K. chip designer which was acquired by Japan's SoftBank in 2016 and spun off again in a second IPO in 2023. It develops power-efficient CPUs that consume less power than the x86 CPUs produced by Intel and AMD. That makes Arm's chips well-suited for smartphones, tablets, Internet of Things (IoT) gadgets, connected vehicles, and even some notebook computers and servers. Its chip designs are now installed in approximately 99% of the world's smartphones, and most of its growth over the past few years has been fueled by its AI-optimized Armv9 designs. Arm's revenue rose 24% in fiscal 2025 (which ended this March), and analysts expect that figure to grow at a CAGR of 21% over the next three years. Its EPS, which surged 159% in fiscal 2025, is expected to grow at a CAGR of 41% through fiscal 2028. Arm originally only generated its revenue by licensing its designs to chipmakers like Qualcomm, MediaTek, and Apple instead of producing its own chips. But earlier this year, it announced that it would start developing its own first-party chips and outsource its production to Taiwan Semiconductor Manufacturing. That surprising move would boost Arm's operating expenses and turn it into a direct competitor for some of its top clients. But it could also undercut other Arm-based chips because it doesn't need to pay any royalties or licensing fees for its own designs. Its first-party brand recognition could also make it a more appealing option than third-party Arm-based chips for OEMs. Arm's stock certainly isn't cheap at 113 times this year's earnings, but it could be a great long-term play on the market's growing demand for more power-efficient AI chips. Should you invest $1,000 in Credo Technology Group right now? Before you buy stock in Credo Technology Group, 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 Credo Technology Group 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 $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%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 June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon and Apple. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Apple, Intel, Microsoft, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Yahoo
30-05-2025
- Business
- Yahoo
ARM vs. APP: Which AI-Exposed Tech Stock is a Better Buy Right Now?
Both AppLovin Corporation APP and Arm Holdings plc ARM and are tech companies riding the AI wave, AppLovin through sophisticated AI-driven advertising algorithms and app monetization engines and Arm Holdings through its advanced chip architectures that fuel AI hardware performance, making them compelling, innovation-focused plays on the accelerating demand for AI solutions across industries. Their shared emphasis on harnessing artificial intelligence to drive efficiency, scalability, and business impact places them at the forefront of a broader technological shift, where AI is rapidly becoming central to competitive advantage and long-term growth. AppLovin is accelerating its evolution into a leading AI-powered advertising platform, shifting its core strategy toward high-growth, high-margin segments within the digital ecosystem. A key milestone in this transition was the $900 million sale of its gaming unit to Tripledot Studios, allowing the company to streamline its operations and intensify focus on its proprietary AXON 2.0 technology, an AI engine that intelligently optimizes ad delivery, targeting, and performance. With AI now embedded at the heart of its operations, AppLovin is investing heavily in automation and advanced algorithmic tools designed to enhance advertiser efficiency and drive better outcomes across campaigns. These innovations enable the platform to serve over 10 million businesses globally, offering data-driven precision and scalability in an increasingly competitive digital advertising market. AppLovin's recent earnings underscore the impact of its AI-led approach to advertising. The company continues to benefit from AXON 2.0, which uses deep learning to deliver high-conversion ad placements across mobile apps. In the first quarter of 2025, revenue surged 40% year over year, driven by strong advertiser demand and improved campaign performance through intelligent optimization. Operational efficiency has scaled with AI integration, as reflected by an 83% year-over-year jump in adjusted EBITDA, alongside a remarkable 144% increase in net income. For the full year 2024, revenue rose 43%, while adjusted EBITDA climbed 81%, validating the company's ability to deliver profitability through advanced technology and smart resource allocation. Arm Holdings maintains a dominant foothold in the semiconductor industry. Its low-power chip architecture has long been a critical component in smartphones and tablets. Major tech giants like Apple AAPL, Qualcomm QCOM, and Samsung have consistently relied on ARM's designs. ARM remains well-positioned to benefit from rapid advancements in AI and the Internet of Things. Its energy-efficient chips are increasingly embedded in smart devices, autonomous technologies, and cloud infrastructure. With AI workloads and IoT deployments accelerating, the need for scalable, power-efficient solutions has never been greater. Arm Holdings' ongoing efforts to tailor its architecture for AI applications further enhance its growth prospects. A distinctive aspect of Arm Holdings' business model is its licensing and royalty structure. ARM licenses its chip designs to major technology companies and earns royalties on every chip sold. This model provides a steady stream of revenues without significant capital expenditure. Furthermore, partnerships with key industry players allow the company to maintain relevance, ensuring it remains a preferred choice in sectors like automotive, data centers, and smart devices. Currently, tariff-related risks pose a potential headwind for Arm Holdings. The company revealed that approximately 10–20% of its royalty revenues stem from shipments into the U.S. market. Ongoing tariff tensions risk raising the cost of imported chips, which could dampen end-market demand in the United States. Higher prices may make imported, ARM-based devices less attractive compared to domestically produced alternatives, weakening ARM's competitive edge. This could lead to a decline in royalty revenues and, potentially, a slowdown in its licensing business. As a result, new product development may face delays, and demand for ARM's technology licenses could be negatively impacted. According to the Zacks Consensus Estimate, APP is poised to deliver a robust 24% year-over-year increase in sales, along with an impressive 85% surge in earnings per share (EPS) for the current fiscal year, highlighting strong operating leverage and accelerating profitability from its AI-driven advertising platform. Image Source: Zacks Investment Research In contrast, ARM is expected to report a more modest 17% sales growth and a relatively muted 5.5% increase in EPS, suggesting a steadier growth trajectory as it continues to scale its licensing model and invest in AI-enabled chip innovation. While both companies are benefiting from secular tech tailwinds, APP's significantly higher earnings momentum may reflect greater short-term operational efficiency and demand capture in the evolving digital advertising landscape. Image Source: Zacks Investment Research Arm Holdings trades at a forward 12-month P/E of 70.45X, well below its median of 103.99X, signaling a relative valuation discount. However, it still carries a steep premium, reflecting lofty expectations tied to its AI and IoT potential. In contrast, AppLovin's forward P/E of 39.05X is only slightly above its median of 38.78X, suggesting a more grounded valuation. Given APP's stronger earnings growth outlook and operational momentum, its current valuation appears more attractive. Investors may find better near-term upside in APP, especially as its AI-driven ad tech model continues to convert growth into profitability more effectively. While both Arm and AppLovin are strategically positioned to benefit from the rise of AI, AppLovin stands out for its ability to translate innovation into profitability more efficiently. Its sharpened focus on AI-powered ad technology, combined with strong operational execution, positions it for sustained growth. Moreover, AppLovin's valuation appears more grounded relative to its earnings potential, offering a favorable risk-reward profile. In contrast, Arm Holdings' premium pricing and exposure to external risks could limit near-term upside. For investors seeking a tech-forward, AI-driven company with scalable returns and strategic clarity, AppLovin emerges as the Buy right now. APP currently sports a Zacks Rank #1 (Strong Buy), while ARM carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank stocks here. 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 QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report ARM Holdings PLC Sponsored ADR (ARM) : Free Stock Analysis Report AppLovin Corporation (APP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Daily Mail
29-05-2025
- Business
- Daily Mail
Hands off our pensions Chancellor! Don't dictate where we put our life savings, says ALEX BRUMMER
The tragedy of British pension funds is that their holdings of UK equities have dwindled to negligible levels. The allocation to UK shares has fallen from some 53 per cent in 1997 to a pathetic 4.4 per cent now. Not only have values on the London Stock Exchange been suppressed but it has also enabled overseas and private equity plunderers to spirit away some of Britain's most promising enterprises such as smart chip pioneer Arm Holdings. Chancellor Rachel Reeves correctly has diagnosed that the biggest pots of savings in Britain are not working in the national interest. She has persuaded 17 of the biggest UK private pension managers to allocate up to £50billion of defined contribution funds to the UK, with infrastructure and start-ups the priorities. In the latest move, designed to replicate the investment success of Canada's public sector union schemes and the Australian superannuation fund, she wants £1.3trillion of scattered defined benefit assets held by local authorities and others to be reorganised into several mega-funds. That could slash costs and make it easier to back UK projects. All fine and dandy – except the Treasury has now disclosed it would seek back-up powers to ensure unlocked money is directed into 'local investment priorities'. The notion of Government dictating where people's life savings are invested would be a horrendous error. It would undermine the fiduciary duty of trustees to secure the best returns and betrays the choices offered by Britain's free market economy. Far better if, instead of thinking Government knows best, Reeves looked at why pension funds are so risk-averse. Over-regulation after the Maxwell pension scandal of 1991 caused managers to favour safe assets, notably Government bonds, over equities. The switch from UK share investment to overseas assets and gilts was exacerbated by Gordon Brown's 1997 raid on the tax break on dividends paid into pension funds. Reeves' priority should be to invigorate UK equities. She could abolish stamp duty on UK share trades, which places British investors at a disadvantage. The Australian, Canadian and US pension funds all have far larger exposure to equities. In America, where equity culture is strong, 54 per cent of pension savings are held in shares. In Australia, some 24 per cent (six times the UK) is invested in local equities. Before these big battalion investors expose themselves to infrastructure and start-ups they should prioritise existing quoted entities. The first objective should be to recreate an equity culture. There is no shortage of private equity, hedge fund, family offices and national wealth funds ready to back infrastructure and start-ups. Branching out Our high street banks could learn from Nationwide. As commercial banks require people to travel ever further for branch services, or to find a working ATM, Debbie Crosbie is pledging to keep a busy branch network intact until at least 2028. The need is particularly important among small traders, the elderly, infirm and technophobes who find navigating online apps frustrating. A one-off payment to members at a cost of £615million will be some compensation to customers who, paradoxically for a mutual, had no say in the takeover of Virgin Money, which makes Nationwide the second-biggest mortgage lender. A 30 per cent rise in profits to £2.3billion, with only a minimal contribution from Virgin, suggests more to come. The jury is still out on the deal, with new write-downs possible. Systems and people integration are far from over. Nationwide's re-entry into business banking, building on Virgin Money's operation, must be a good thing. Smaller enterprises and start-ups need all the help that can be mustered. Intelligent choice The New York Times isn't waiting to see its intellectual property disappear over the horizon in the great AI scam. It has a deal with Amazon where its output will be paired with products and services such as Alexa. Better to be part of the AI revolution, rather than shout from outside the tent. It is a lesson the music industry learned when Spotify invaded.
Yahoo
29-05-2025
- Business
- Yahoo
Arm Holdings (NasdaqGS:ARM) Collaborates With Cerence AI To Enhance In-Car AI Capabilities
Arm Holdings has been a focal point in the market, witnessing a 21% price increase over the past month, underpinned by a recent strategic partnership with Cerence Inc. This collaboration aims to enhance AI capabilities, potentially strengthening Arm's position in the competitive tech landscape. Amidst mixed movements in major indexes and a rally in technology stocks following Nvidia's strong earnings report, Arm's partnership news likely added upward momentum in countering broader market shifts. Meanwhile, Arm's promising full-year financial metrics and future guidance could have fortified investor confidence amid fluctuating macroeconomic trends. Buy, Hold or Sell Arm Holdings? View our complete analysis and fair value estimate and you decide. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 26 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. The recent collaboration between Arm Holdings and Cerence Inc. to enhance AI capabilities is anticipated to bolster Arm's revenue and earnings forecasts. This strategic move is likely to amplify Arm's potential in driving royalty revenues from partnerships with industry giants like AWS and NVIDIA, as AI becomes a cornerstone technology across multiple sectors including smartphones, autos, and IoT. Arm's investment in R&D and effort to expand their market presence through advanced technologies may further sustain this revenue trajectory despite existing challenges like the Qualcomm lawsuit and concentrated customer base. Over the longer term, Arm's shares have seen a total return of 12.34% over the past year, indicating steady performance amidst broader market fluctuations. Although Arm's one-year return matched the US Market, it surpassed the Semiconductors industry growth of 9.1%, underscoring its resilience and competitive edge in the tech sector. Given the recent strategic developments, analysts remain optimistic about Arm's future prospects, setting a consensus price target of US$131.81. This stands in contrast to the 21% share price jump in recent months, yet Arm's current share price at US$122.44 reflects a 2.75% discount to this target. However, bullish analysts suggest a higher fair value target of US$203.0, based on expectations of significant revenue growth and improved profit margins through 2028. Investors might assess these factors when considering Arm's valuation in the context of projected earnings growth and market expectations. Click here and access our complete financial health analysis report to understand the dynamics of Arm Holdings. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:ARM. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-05-2025
- Business
- Yahoo
Mizuho Maintains Outperform Rating on Arm Holdings (ARM)
On Thursday, May 22, Mizuho Securities reaffirmed an 'Outperform' rating on Arm Holdings plc (NASDAQ:ARM) with a price target of $160. The decision came after investor meetings with the company's Vice President of Investor Relations, Jeff Kvaal. According to Mizuho analysts, Arm Holdings plc (NASDAQ:ARM) is expected to grow steadily. The analysts forecast the company to grow its licensing at a rate of 7-10% and royalties at a rate of 20% each year for the next 2-3 years. A technician in a pristine lab, focused on designing a new semiconductor chip. Arm Holdings plc (NASDAQ:ARM) is expected to gain market share in the server CPU market through its products like Graviton, Axion, Cobalt, and Grace. The company had a 15% market share in 2024 and is now aiming for a 50% market share. Additionally, Arm Holdings plc (NASDAQ:ARM) is also increasing its share in the PC market. The company is estimated to have reached about 14% in Q1 2025, up from 11% in Q4 2024. The company's Stargate project, which is set to be introduced in the second half of 2026, is a big opportunity for the company. It will potentially incorporate a custom ARM Accelerator, which could help Arm Holdings plc (NASDAQ:ARM) significantly expand its total addressable market. Mizuho analysts believe that ARM is positioned well to benefit from the ongoing expansion of cloud server data centers and innovation in AI. Arm Holdings plc (NASDAQ:ARM) is a British semiconductor and software design company that develops and licenses advanced IP solutions to leading technology companies. While we acknowledge the potential of ARM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ARM and that has a 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: 11 Stocks That Will Bounce Back According To Analysts and 11 Best Stocks Under $15 to Buy According to Hedge Funds. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
