Where Will Arm Holdings Stock Be in Five Years?
With shares up by a whopping 37% year to date, Arm Holdings (NASDAQ: ARM) is one of many technology companies that have received significant attention because of their potential in artificial intelligence (AI). But unlike alternatives like Nvidia, the hype surrounding Arm Holdings hasn't materialized into significant business growth. Let's dig deeper into what the next five years could have in store for the company.
Since its initial public offering (IPO) in September 2023, Arm Holdings has become a Wall Street darling. The U.K.-based technology company designs and licenses high-performance, energy-efficient designs for central processing units (CPUs) -- a type of semiconductor chip that enables computers to run their operating system and applications.
While Arm doesn't sell chips directly, some investors are optimistic that AI-related demand could boost its business. But so far, the numbers aren't impressive. Fiscal third-quarter revenue increased by only 14% year over year to $824 million, while net income halved to $87 million. To make matters worse, Arm's management states that this modest growth was mainly because of a recovery in the smartphone market, which has nothing to do with AI.
Source Fool.com
