Stock Surge
The share price of British chip designer Arm Holdings Plc – ARM – skyrocketed on Monday, with a remarkable surge of over 30%.
Solid Performance
Last week, the company reported quarterly sales of $824 million, surpassing the analyst consensus of $761.62 million. Moreover, Arm Holdings reported an adjusted quarterly EPS of $0.29, outperforming the analyst consensus of $0.25.
Market Reaction and Analysis
The stock gained an incredible 117% last week, with the increase representing close to $100 billion in market cap. In contrast, rival chip designer Nvidia Corp – NVDA – experienced a 7% gain last week.
The company’s success was attributed to rapidly increasing penetration of Armv9-based chips and strong demand for more advanced Arm CPUs driven by companies’ increased investment in AI. Analysts lauded the upside from smartphones as well as the incremental gains from under-indexed applications such as Data Center, Automotive, and IoT.
Analyst Insights
Morgan Stanley analyst Lee Simpson highlighted ARM’s accelerating growth, citing the momentum in AI design adoption and the outsized impact of ARMv9 in royalties, even at this early stage in the product cycle. Simpson adjusted his fiscal estimates, raising the price target and lauding ARM as the silicon IP leader with a 60%+ share of global semiconductor IP sales, including a ubiquitous position in smartphones.
ARM shares were trading higher by 30.4% at $149.59 at the last check on Monday.
Photo via Wikimedia Commons
