It might be hard to call Arm Holdings (NASDAQ: ARM) an overlooked AI stock at this point.

After all, the chip designer trades at a lofty price-to-sales ratio of 50, but that's not the best way to evaluate the stock.

Arm is highly profitable, generating a 43.6% adjusted operating margin in its fiscal year ended in March. That means that on the more conventional price-to-earnings basis, the stock is still expensive, but more reasonably priced, especially considering its accelerating growth rate and its long-term potential in AI chips.

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Source Fool.com