Where Will Arm Holdings Stock Be in 5 Years?
With its September market debut, British chip designer Arm Holdings (NASDAQ: ARM) has been one of 2023's hottest initial public offerings, arriving just in time to capitalize on the AI hype cycle. But while the company managed to generate a buzz, concerns about lackluster growth and an undiversified business model weigh on its lofty valuation. Let's explore what the next five years could look like for this hot new stock.
Founded in 1990, Arm Holdings is a technology company that focuses on designing central processing unit (CPU) cores with its proprietary architecture. The company's designs are low-cost and energy-efficient, making them popular in consumer products such as smartphones, where it has a market share of 99% in the premium category.
Arm was taken private by the Japanese investment company , which acquired it in 2016 before relisting it on public markets this year, presumably looking to take advantage of the AI hype to obtain an inflated valuation. But to be fair, Arm actually does stand to potentially benefit from AI growth, even though it doesn't participate in the consumer side of the industry.
Source Fool.com
