10 Best UK Stocks to Invest in Now

6) Arm Holdings plc (NASDAQ:ARM)

Number of Hedge Fund Holders: 38

Arm Holdings plc (NASDAQ:ARM) designs and manufactures semiconductor technology and other related products such as computer processors, memory controllers, and storage devices. The company is headquartered in Cambridge, the United Kingdom.

Arm Holdings plc (NASDAQ:ARM)’s competitive advantage stems from the intangible assets and switching costs. The company’s strategic positioning in AI applications should continue to aid its growth prospects. As and when the demand for AI-capable devices grows throughout sectors, Arm Holdings plc (NASDAQ:ARM)’s chip designs will be preferred for their energy efficiency and performance characteristics. The adoption of its latest v9 architecture should drive increased royalty rates, potentially doubling the rate as compared to the previous v8 architecture.

Edge AI and the IoT offer additional avenues for expansion. As more devices need AI processing capabilities at the edge, Arm Holdings plc (NASDAQ:ARM)’s energy-efficient designs remain well-positioned to tap this growing market. Furthermore, its expansion into the data center market provides a significant growth opportunity.

Wall Street believes that Arm Holdings plc (NASDAQ:ARM)’s architecture remains well-suited for cloud computing workloads, providing a balance of performance and power efficiency. The company’s technological moat with energy-efficient designs and strategic positioning in AI and edge computing are some of its key strengths.

Arm Holdings plc (NASDAQ:ARM)’s ecosystem of software and design partners remains unprecedented. Its ecosystem of over 20 million software developers is the largest compute ecosystem. The company continues to increase investment in its ecosystem throughout all market segments. More Arm software developers result in more demand for the Arm compute platform, creating a virtuous cycle of demand.