7 Best UK Growth Stocks To Invest In

1. Arm (NASDAQ:ARM)  

Number of Hedge Fund Investors: 38

Arm (NASDAQ:ARM) is a semiconductor company based in the UK that has been revolutionizing the industry with its innovative intellectual property for processors. Arm’s (NASDAQ:ARM) business model is supported by strong license and royalty revenue growth, driven by the increasing adoption of its chip architecture, which offers significant cost and energy efficiency advantages. The company’s partnerships with leading technology giants such as Amazon, Google, Microsoft, and Nvidia further solidify its position in the market.

The company’s royalty revenues have been consistently increasing, driven by the increasing adoption of its Armv9 architecture, which offers 35% greater performance efficiency compared to its predecessor, Armv8. Additionally, Arm’s chip shipments have averaged 4% growth for the past three years, with revenue per shipment increasing moderately by 7%. The company’s license revenue has also seen significant growth, with an average increase of 30% over the past four years, driven by the rising number of licensees, which has grown by 25% annually.

Arm (NASDAQ:ARM) has dominant position in mobile applications, with a 99% market share, and its growing presence in high-growth end markets such as cloud and network equipment, position it for continued success.  In the second quarter, the company’s stock was held by 38 hedge funds with stakes worth $979.08 million. D E Shaw is the largest shareholder in the company with a stake worth $340.67 million as of June 30.

While we acknowledge the potential of Arm (NASDAQ:ARM) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ARM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.