I don’t often show daily charts on QV but this is interesting (a) because there is so little trading history and (b) because it is a perfect example of a breakaway gap. After the results, the shares exploded higher creating a $17 gap in trading. Some chartists say this needs to be filled. Maybe it will, maybe it won’t, but it often signals the beginning of a sustained uptrend.
I have been looking for some time for what I call a third exciting AI stock. My first two are Nvidia and Super Micro and their shares have been racing higher. Now I think there is a possibility that ARM could join that group. They are talking the talk, that is for sure.
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ARM Tech is Corner Stone of Modern Computation
Naysayers don’t understand what ARM is as a company. If 7 out of 10 of the premium, midrange, and low range cars in the world had engines that where licensed to the car maker by one company that company would be in the same league as ARM. Apple, HP, Dell, Samsung, Google, Facebook, IBM, Nvidia you name the computer company and I can most likely show you where they license ARM technology for one or more of their flagship products. Why do you think the FTC wouldn’t let Nvidia buy them. Their tech is the corner stone of modern computation.
Whitmo G, Yahoo Finance Chat Room, 15 September 2023
ARM Holdings is on such a ferocious valuation (100-plus PE ratio) that the only bulls I can find are in the Yahoo Chat Rooms. Of course, I am a bull too. Valuation is ALWAYS a red herring with these great growth stocks. ARM is 3G and loaded with magic, innovation and ‘something news’. I don’t care about the damn PER, I want to hold the stock for the great times that are coming for this business. Imagine if it had become part of Nvidia but that didn’t happen.
As the guy from the chat room says ARM is at the heart of the computing revolution. What a fantastic place to be. How does anyone put a price on that? And the chart has just those explosive characteristics I like to see. ARM could be a monster winner.
Arm is the world’s leading technology provider of silicon IP, software tools, and support for intelligent systems-on-chip (SoC) at the heart of billions of devices. Our portfolio of products helps our partners accelerate time to market with the right power, performance, and size for the product. Arm-based chips, device architectures, and technologies orchestrate the performance of everything that makes modern life possible.
ARM website
What we are seeing is more and more AI demands in the data centre, whether that’s around training or inference. And because the Arm solution in the data centre, in particular, is extremely good in terms of performance per watt and the constraints that are on today’s data centre is relative to running these AI workloads puts a huge demand on power, that’s a great tailwind for Arm. If we move to the edge devices such as a smartphone, we’ve seen, and I think the recent launches, as I mentioned, with Gemini Nano and the Galaxy S24, increased AI workloads being pushed to the phone.
And what we’re seeing from the design standpoint is more and more compute technology being pushed into those phones such that they are AI capable and AI ready because this field is moving very, very fast. You know, a year from now, who knows what the type of AI applications it might be able to run on a smartphone. So, what we’re seeing is a shift to more and more high-performance-capable technology to capture a wave to ensure that they can run these AI workloads. Nobody wants to be caught behind with not enough performance when the new application comes out.
So, that has accelerated the v9 adoption, both from a standpoint of more devices using it and more devices using more of it. And to your question, where is it coming from? It’s coming from everywhere. It’s coming from certainly the data centre, certainly from the edge devices, and we think, over time, even AIPCs*. So, it’s a huge growth vector.
Rene Haas, CEO, ARM Holdings, Q3 2024, 7 February 2024
*Artificial intelligence is expected to spur the personal computer market going forward, with AI-powered laptops estimated to account for nearly 90pc of total laptop sales in China by 2027, industry experts said.
AI-powered PCs, or AIPCs, integrate AI into the processors. They are capable of independently running large language models (LLMs) and applications, and are free from traditional cloud dependency — a critical turning point in the development of electronics, according to a white paper released by market consultancy International Data Corp and US chipmaker AMD recently.
At a time when the global PC market has remained sluggish on the back of falling demand and other uncertainties, AI-enabled chips are expected to usher in new growth points and drive stable growth of the PC sector in the next few years.
China Daily, 24 November 2023
Look at this for a quote.
We’re thrilled about Q3, and we’re very, very excited about Q4. I think what you’re seeing coming to life are all the strategies that we’ve been working hard on over the last number of years, investment in the v9 technology, the diversification of our business into data centre, into automotive, and, of course, IoT [internet of things], and now what I think is probably the most profound opportunity in our lifetimes, which is around AI. And I think regarding AI, particularly when you think about artificial general intelligence, that’s going to drive the need for more compute in a way that we’ve never seen before.
So, as good as the last couple of quarters were, we’re just at the beginning. I could not be more excited about the growth that we have going forward,
Rene Haas, CEO, ARM Holdings, Q3 2024, 7 February 2024
That says it all!
Strategy – Buy Shares in ARM
It took a while for the penny to drop that ARM Holdings (ARM) is a fantastically exciting share. Better late than never. I have got it now and regard the shares as another SCREAMING BUY in a world at the dawn of a period of dramatic technological advances. Valuation, schmaluation – these shares are never going to be cheap. ARM is pure intellectual property. This company is like a university. It is stuffed with engineers and spends over half revenue on research and development.
A friend of mine who frequently drives into Cambridge says ARM is expanding fast.
British global semiconductor and software design company, Arm Holdings, selected Kier Construction to undertake their Cambridge global headquarters expansion and allow them to double its headcount to 3,000 people.
The £48m works consisted of 18,000 square metres of Grade A office space and two multi-storey car parks with 800 spaces on the Arm campus site at Peterhouse Technology Park in Fulbourn.
The buildings are linked to the existing Arm buildings by a new estate road and as the Arm’s main product is the ARM processors (CPUs), the building design is inspired by the structure of silicon.
Riddell Construction Consultancy
Was AI ever going to pass this business by – no way!
Share Recommendations
ARM Holdings. ARM. Buy @ $116.50
