We recently compiled a list of the Jim Cramer Discussed 18 Companies That Hit $100 Billion in Market Cap in 2024. In this article, we are going to take a look at where Arm Holdings plc (NASDAQ:ARM) stands against the other companies that hit $100 billion in market cap in 2024.
Jim Cramer, the host of Mad Money, recently discussed a number of companies that have surpassed $100 billion in market capitalization this year, noting how these companies seem to reflect the current market mood. According to Cramer, it used to be a significant achievement for a company to reach the $100 billion mark, as most companies would never attain that level of market cap.
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He emphasized the immense effort and determination required to achieve such a feat. However, Cramer pointed out that in today’s market, the $100 billion threshold has lost some of its significance, given the recent surge in stock valuations. He highlighted that, as of the market close last Friday, 18 companies had crossed the $100 billion mark in 2024, a notable increase that speaks to the current market dynamics.
Cramer acknowledged that stocks, like everything else, had to contend with inflation, which remains a persistent issue. He went on to say:
“I know we’re experiencing a heightened market, with expectations really running so hot that you can’t believe that a presidential rally, or, let’s say, an end-of-the-year rally and a stock shortage rally are all in play at once. Many of these stocks got clocked today as part of a sell-off that seemed to infect the year’s best performers. I don’t know how long it’ll last, maybe some great buying opportunities already.”
Cramer concluded that the massive influx of capital into the market is a clear driver behind the rise in companies reaching the $100 billion valuation.
“But bottom line: When you get this much money coming in, you can see how all these companies can reach $100 billion, creating a huge amount of wealth, at least on paper. One more reason why it wouldn’t be so bad if some of the winning investors in this market took something delicious off the table.”
Our Methodology
For this article, we compiled a list of 18 stocks that were discussed by Jim Cramer during the episode of Mad Money on December 9. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A robotic arm holding a semiconductor chip, emphasizing the precision and quality of the company’s production equipment.
Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Cramer highlighted that under the leadership of its CEO Rene Haas, Arm Holdings plc (NASDAQ:ARM) stock has roared and its market cap reached $100 billion in 2024.
“We are having a tough time getting IPOs to market, which means the ones we do get tend to be priced too low thanks to a paucity of buyers and that’s what I think happened with the stock of Arm Holdings, the semiconductor architecture company that’s partnered with Nvidia for all sorts of gizmos and it’s all over the cell phone and servers too. Arm’s growing incredibly fast and CEO Rene Haas has steered the company’s stock to an 87% return, joining the hundred billion dollar pantheon.”
Arm (NASDAQ:ARM), a key player in the semiconductor industry, specializes in designing and licensing central processing unit technology and related components. Rather than manufacturing chips itself, it generates revenue through licensing its processor designs and collecting royalty fees from companies that integrate its technology into their products. With the rise of advanced technologies like AI, the company expects to see increased demand for its chip architectures, as the complexity of chips grows to accommodate these emerging technologies.
In line with this trend, the company reported significant growth in its licensing business. By the end of the second quarter of fiscal 2025, the company had secured 39 Arm Total Access licenses, up from 33 in the previous quarter. Additionally, the number of Arm Flexible Access licensees increased from 241 to 269, reflecting a broader adoption of its technology. This expansion in licenses directly correlates with increased royalty revenue, as the chips created using these licenses are sold and used in a variety of devices and systems.
Earlier it was disclosed that Nvidia’s largest investment of $147.3 million was in Arm (NASDAQ:ARM), which it failed to acquire due to an antitrust issue two years ago. Additionally, CEO Rene Haas, highlighted a shift in the company’s business model, explaining that in the past, it would have seemed unrealistic for Arm to charge $100 per system-on-a-chip (SoC).
However, with its pricing now set between 50 cents and $1 per core, Arm is generating over $100 per SoC when multiple cores are included. Haas pointed out that this new pricing structure reflects the growing value of Arm’s technology in the burgeoning AI and cloud computing sectors.
Overall ARM ranks 18th on our list of the companies that hit $100 billion in market cap in 2024 according to Jim Cramer. While we acknowledge the potential of ARM as an investment, 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.
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Disclosure: None. This article is originally published at Insider Monkey.