Jim Cramer’s Latest Game Plan: 15 Stocks to Watch

12. Arm Holdings plc (NASDAQ:ARM)

Number of Hedge Fund Holders: 38

Discussing Arm Holdings plc (NASDAQ:ARM), Cramer highlighted how the semiconductor industry is presently “mood dependent”. It is set to report its second quarter earnings report of fiscal year 2025 on November 6.

“After the close, Arm Holdings reports. Now, this chip architecture play is tightly linked with Apple, but Arm’s IP is everywhere. I think it prints an excellent number, but you know what? That might not matter to this particular stock market if it’s in a bad mood day because the semis has suddenly become mood-dependent, not earnings-dependent. We also wanna know about Arm’s lawsuit with Qualcomm. Seems very nasty.”

Arm Holdings (NASDAQ:ARM) is a prominent player in the semiconductor industry, known for designing and licensing central processing unit (CPU) products and related technologies. Although the company does not manufacture chips itself, its designs serve as the foundation for semiconductor companies and original equipment manufacturers (OEMs), who then customize these designs to meet specific needs.

Its business model revolves around licensing its CPU architectures and collecting royalties on every product sold that incorporates its designs. According to the company, approximately 280 billion products incorporating its technologies have been shipped. The company’s influence extends beyond traditional markets, as it is gaining traction in the personal computer (PC) and data center sectors.

The company’s flexible business model allows its clients to optimize chips for specific applications, contributing to its growing footprint in these areas. CEO Rene Haas has expressed confidence that the company could capture 50% of the Windows PC market within the next five years.

As reported by Bloomberg, Arm Holdings (NASDAQ:ARM) has issued a 60-day notice to Qualcomm, signaling its intent to cancel its architectural license agreement, which allows Qualcomm to create its own chips based on Arm’s standards. This move is part of a broader dispute that began in 2022, when the company sued Qualcomm for breach of contract and trademark infringement.

The disagreement centers around Qualcomm’s 2021 acquisition of Nuvia, another Arm licensee, and Arm’s contention that Qualcomm failed to renegotiate contract terms following the acquisition. Qualcomm, on the other hand, argues that its existing agreement still covers Nuvia’s activities. Both companies are set to face off in court to resolve the matter.