20 Worst Performing AI Stocks of Last Week

13. ARM Holdings plc (NASDAQ:ARM)

Weekly Decline: 12.02%

Number of Hedge Fund Holders: 38

ARM Holdings plc (NASDAQ:ARM) is a semiconductor company based in the United Kingdom. It develops and licenses central processing unit products and related tech for semiconductor companies and original equipment manufacturers.

The primary reason why investors consider ARM Holdings plc (NASDAQ:ARM) to be a desirable semiconductor stock is that it has a unique business model. Instead of actually producing semiconductors, the company designs the infrastructure for CPU chips that its customers, such as Apple, Samsung, Alphabet, and Nvidia, use as a blueprint for building.

Through this model, ARM Holdings plc (NASDAQ:ARM) receives license payments and royalties based on the number of products sold. This model has also helped ARM Holdings plc (NASDAQ:ARM) accumulate a market share of 99% within the global smartphone market.

The main reason why ARM Holdings plc (NASDAQ:ARM) is facing challenges in the current market is its valuation. Many investors are put off by the fact that its P/E ratio is 75.1 since the sector median stands way below this figure at only 22.9. As a result, most investors are avoiding ARM Holdings plc (NASDAQ:ARM) at present, at least until the stock’s price falls to a more reasonable level.

ARM Holdings plc (NASDAQ:ARM) had 38 hedge funds long its stock in the second quarter, with a total stake value of $979.1 million.