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Arm Holdings: Exploring the Range After Explosive RallyArm Holdings (ARM): Decoding the Recent Surge The recent exponential surge in the share price of chip maker Arm underscores the fevered speculation gripping the AI sector. Arm, despite not being directly involved in AI, has become a focal point of attention due to its strategic moves in diversification, particularly in markets like automotive, and the sale of subsystem licenses for integrated chip designs. In Q3, Arm posted impressive numbers, with a 12% surge in headline revenue, reaching $470 million. The Chinese market played a significant role, contributing to a 28% jump in revenue driven by premium smartphones featuring generative AI. The potential for increased royalty rates has further fuelled the positive outlook for Arm. While there are concerns about Arm's high valuation, with a forward earnings multiple of 85, investor optimism persists. This confidence is anchored in Arm's aggressive growth objectives and its pivotal role in the AI and chip design industries, placing the company at the centre of speculative interest. Playing the Range: Short-Term Traders on Alert Arm's post-earnings exponential rally, marked by a gap above January highs and a doubling of share prices, raised eyebrows. However, recent sessions have seen the stock cool off, consolidating within a tight range. This well-defined range presents short-term traders with opportunities: Bullish Scenario: A decisive breakout above the range, accompanied by high volume, could lead to a retest of recent trend highs. Bearish Scenario: A decisive break below range could see prices retreat back to a short-term mean such as the 50MA – a level which is confluent with the broken January highs. The risk/reward ratio is favourable in both scenarios, offering short-term traders’ opportunities to leverage lower timeframes like the hourly candle chart to time potential breakouts. Arm Holdings (ARM): Daily Candle Chart Past performance is not a reliable indicator of future results Arm Holdings (ARM): Hourly Candle Chart Past performance is not a reliable indicator of future results Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84.01% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
NASDAQ:ARM
by Capitalcom
1
ARM HoldingMy thoughts are that many have not understand that the company have nothing to do with AI, is not a draging up sector company. The company have 2 divisions: 1 design chip and the 2 is licensing. Based on those to facts i thing is just a short FOMO witch today after CPI data came out will drag the price of the company down. The second big argument is that the hike come based on IPO and noisy retail investors. I personally expect a big correction to 100$. Big up Guys!
NASDAQ:ARMShort
by georgethefirst
ARM: Pull-back before next leg-upI fundamentally bullish on this company and think it might be a potential true-market leader in next market up-trend (if we see one in coming years). Structurally speaking, I may see full first impulsive structure completed with today's burst into the top border resistance zone for the final wave (c.v of 1). If this structure will prove to be correct, classical support area for potential correction: 61-55 area. If price follows through to the upside and closes above todays highs, then next resistance level is: 75-81 zone. Moving above 81 will be a sign to re-consider suggested price structure. Thank you for your attention!
NASDAQ:ARMShort
by artemfedorov
2
ARM Holdings Surges Over 45% on Strong AI Chip ForecastsIn a staggering surge, Arm Holdings ( NASDAQ:ARM ), the British tech giant famed for its semiconductor designs, witnessed a remarkable uptick of over 45% in its stock value on Thursday. This meteoric rise was propelled by bullish forecasts, as clientele gear up to fashion cutting-edge chips tailored for artificial intelligence (AI) applications. With the quest for AI-powered devices intensifying, Arm stands at the forefront, poised to reap the rewards of this burgeoning market. Embracing the AI Revolution Arm's ascent stems from its pivotal role in furnishing blueprints and intellectual property crucial for crafting the chips omnipresent in today's mobile phones, notably Apple's iconic devices. The company's trajectory has been deeply intertwined with the surge in demand for AI-centric technologies, with customers increasingly gravitating towards Arm's offerings to fuel their innovation in this domain. Unveiling a Paradigm Shift Arm's executives unveiled a strategic shift, highlighting the surge in clientele opting for Arm-based central processors in tandem with Nvidia's chips for AI-centric endeavors in data centers. Moreover, Arm's foray into developing AI-enabled laptops and smartphones underscores its commitment to pioneering advancements in consumer electronics. By leveraging its unique model of creating and licensing semiconductor designs, Arm has managed to scale rapidly while maintaining a lean operational footprint. Supercharging Growth Through AI Investment pundits underscore the symbiotic relationship between Arm and the AI boom, emphasizing how the company's revenue streams are poised for exponential growth fueled by the AI revolution. Notably, Arm's ability to deliver substantial royalty and licensing revenue reflects its adaptability and resilience in harnessing emerging technological trends. Market Dynamics and Valuation Amidst this fervor, market dynamics come into play, with Arm's valuation reflecting its elevated standing in the tech landscape. Trading at 56.46 times its 12-month forward earnings estimates, Arm's valuation surpasses that of industry stalwarts like Nvidia and Advanced Micro Devices. However, its low-float status renders it susceptible to pronounced market fluctuations, underscoring the need for cautious investor scrutiny amidst this period of exuberance. In essence, Arm Holdings' ( NASDAQ:ARM ) remarkable surge epitomizes the symbiotic relationship between technological innovation and market dynamism, as it harnesses the power of AI to propel itself into uncharted territories of growth and prosperity.
NASDAQ:ARMLong
by DEXWireNews
ARM: Good Share, Bad DerivativeOverview Arm Holdings PLC ( NASDAQ:ARM ) recently had its IPO back in September 2023. Since then it has bounced around between $46-$78 and I think it's gearing for a rally. Unfortunately there is not much room for a confident technical analysis because of ARM's minimal chart history but I believe this company is definitely worth adding to the Watchlist. ARM supplies semiconductor technology and has made it a company mission to lower carbon emissions. From my understanding they are attempting to lower their technology's carbon footprint by maximizing the processing power of their chips per every one watt of energy. Imagine this as the equivalent of increasing a vehicle's total miles per gallon (MPG). I have come under the impression that their technology is delivered to a plethora of companies including NVIDIA and Google who, in turn, use it to develop A.I. projects. It is this aspect that makes me speculatively bullish on the company's outlook. Speculative Projections According to their official website ARM technology can be found in nearly every modern device and is used by "70% of the world's population." ARM's market cap currently rests around $69 billion USD which places it around 1B shares. Since its technology is fueling what is essentially an artificial intelligence bubble within the stock market, it is my personal opinion that a $500B market cap is reasonable if not conservative. This would place ARM's share price around $500 which is a 631% upside from the current share price of $68.34. If you read my other idea on NVIDIA, I've mentioned that outsourcing may become an issue for NASDAQ:NVDA and so I believe that ARM may be able to fill that vacuum should a semiconductor crisis ever occur. A catalyst like this would definitely have the potential for propelling the stock to new highs. Risk Management If picking a good company out of a lineup wasn't enough, now the potential gains to losses needs to be considered. For every dollar risked, I believe at least three dollars should be the reward. With ARM I believe those types of gains are possible however this is the one of those exceptions where I would consider holding shares instead of trading derivatives. I picked through several option contracts, specifically Calls, and noticed that Open Interest was severely lacking on most contracts except for a few expiring within 90 days. Typically 90 days would suffice however with the lack of trading patterns -- and a sense of direction -- I believe this makes derivative trading too risky for ARM. To top matters off, the contracts with high open interest (>1000) would potentially only deliver 1:1 at best case scenario. All that said, the lack of direction and amount of share value that would have to be gained within a short period of time leads me to believe that investing in ARM Calls would be reckless. The Calls worth owning and that have an expiration greater than 6 months out have a near non-existent Open Interest. While that could always change if ARM starts getting some attention from the market, this may lead to illiquidity and an inability to unload the contract. Fundamental Analysis Current ratio (current assets / current liabilities) = 4.33 * Any ratios under 1.00 are considered a financial risk. Retained earnings = $2.440B which was a slight decrease from $2.457B in March 2023. * Allows the company to invest in itself (repurchase shares, expand, etc) Net income 6 Months Ended September 30 = ($5M) loss * The majority of the loss appears to have come from escalated operating expenses within the second quarter. This is a drastic 101.5% decrease from September 30, 2022 which had a net income of $339M. I'm experiencing some difficulty interpreting the Q2 Earnings Call. I am a self-taught analyst and learn on-the-go so I will need to process this information more before coming to a confident conclusion on the fundamental analysis. However, it does seem that operating expenses increased significantly (approximately by 171.8%) in the second quarter alone. I will make sure to provide any updates to my findings as a comment on this idea.
NASDAQ:ARM
by Shepherd_Investor
3
ARM: $53 | Reset for Fresh Investors WAiTiNGMasa or Softbank's huge position is significant as it is forced to book GAiNS to cover other FUNDS that got rekt from bad deals the likes of WeWork Slack Katera Uber to name a few the press release or promo that Apple Nvivdia the rest taking a position is cool cool that if it goes below $30 expect these friendly competitors to upsize position for a potential Take Over for now we wait wait wait wait as NViDiA TOPPiNG or toppish of the Tech sector recently where its CEO and Snowflake were selling nvidia shares while doing the roadhsow entitled NViDiA SUmmit selling to the PUBLIC while smart money booking HUGE GAiNS
NASDAQ:ARM
by senyor
Patent Expirations And Competition May Limit ARM’s Market ShareKey points 1. ARM is a leader with a saturated number of customers limiting future growth. It’s in a highly competitive landscape and needs to innovate beyond patent expirations in the 2030s. 2. As a controlled entity of SoftBank, I expect the board to push for buybacks in a bid to maximize returns. 3. I expect SoftBank to slowly unload its stake, while ARM buys back their stock - this may initially sustain the price. Prospects Are Still Solid After IPO ARM designs and licenses processors to manufacturers, it is the engineering company behind the world’s CPUs. About 70% of the world’s population uses Arm-based products. More than 30 billion ARM-based chips (smartphones, small electronics, data centers, networking equipment) were shipped in FY '23, representing an approximately 70% increase since 2016. Most of ARM’s IP sales are in the United States, however a good combined portion are in East Asia, including China (PRC), Taiwan and South Korea. The business model of the company is to design ARM-chips and license them out to manufacturers. It sells the intellectual property behind chips, but doesn’t produce the hardware. This is an engineering-first company, with approximately 80% of global employees focused on research, design, and innovation. The company reaches scale with the ability to license out each CPU product to multiple companies. ARM is a high performing company, with a gross margin of 80% and operating margins of 25%. The company made $2.7 billion in revenues in 2022 that stagnated in the IPO year. Despite stagnating in its IPO year, it’s future prospects from here are still solid as demand for their IP continue to grow. But I don’t believe it’ll grow revenues as fast as analysts are expecting (14% per year). ARM’s Market Share May Suffer As Patents Expire Arm has an addressable market of $202.5 billion, and expects it to grow at a 6.8% annual rate to $246.6 billion by the end of 2025. The company estimates the aggregate value of chips containing Arm technology to be approx. $98.9 billion in 2022, representing 48.9% market share. This market share is large even for a market leader. Competitors and expiring patents can become significant forces driving down the market share for ARM in the future. Notably most of the key ARM patents are expected to expire in the 2030s: The expiration of these patents can open the door for more companies to design and manufacture ARM-based chips. Limited New Customer Growth, But Opportunities in Smart Devices More than 260 companies reported that they had shipped Arm-based chips in 2023, including: Mobile computing: Apple, Guangdong OPPO, Samsung, Vivo Mobile, Xiaomi. Cloud computing: AWS and Alibaba Industrial IoT: Cruise and Mercedes-Benz, Raspberry Pi, Schneider Electric, and Siemens. ARM also entered into a long-term agreement with Apple that extends beyond 2040 allowing the company to use Arm architecture for their CPUs. The customer base for ARM is well established, and the company is at a phase where it will have a harder time acquiring new customers, rather it will have to rely on industry growth and innovation in order to increase revenue. One of the highest-potential growth avenues for ARM is the smart devices vertical. ARM’s CPU architecture fits well in small devices, giving it an advantage over peers with larger CPUs. As compute power increases, it will become more practical for consumers to rely on mobile devices and wearables instead of larger devices for everyday needs, this has the potential to widen the TAM. Another growth avenue for the company is the market adoption of electronically rich vehicles and EVs as well as the capitalizing on government programs subsidizing EVs. Vehicles have an increasing number of processing demands both in central systems, and IoT linked sensors. Selling Pressure From SoftBank May Limit Price Appreciation ARM is a controlled entity owned by SoftBank Group with approximately 90.6% of their outstanding ordinary shares following the completion ARMs IPO. Arm’s Top Shareholders ARM’s IPO is pushed by SoftBank who is looking to cash-in on their investment or escape with minimal losses. One scenario is to expect a continuous selling from SoftBank, which means that there may be selling pressure for some time keeping price appreciation moderate until the stock flips to a diversified investor base.
NASDAQ:ARMLong
by DEXWireNews