10 Best Semiconductor Stocks With The Highest Upside Potential

6. Arm Holdings plc (NASDAQ:ARM)

Upside Potential: 42.26%

Market Capitalization: $126.18 Billion

Number of Hedge Fund Holders: 43

Arm Holdings, plc (NASDAQ:ARM) designs energy-efficient, high-performance CPUs used in a wide range of devices, from small sensors to powerful supercomputers. Its flexible licensing model helps companies save on development costs, reduce risks, and speed up product launches. Arm’s customers include big companies like AMD, Amazon, Intel, NVIDIA, and Samsung. Its products are used in smartphones, consumer electronics, networking, data centers, automotive, IoT, and embedded devices. The company’s technology is important for AI and machine learning applications, such as generative AI in data centers and live translation in mobile devices. It’s also used in AI-powered automotive systems (like hazard detection) and embedded devices (such as face recognition in smart locks).

Arm Holdings, plc (NASDAQ:ARM) saw a 47% year-over-year revenue increase in Q4 2024, with licensing revenue up 60% and royalties up 37%. The company’s transition to V9, AI integration, and expanding presence in the data center and automotive markets are expected to drive further growth, with licensing and royalties poised to grow significantly. The company expects sustained revenue growth of at least 20% annually through 2026 and 2027.