8. ARM Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
Jim Cramer highlights ARM Holdings plc (NASDAQ:ARM) as a top pick despite recent volatility. ARM Holdings plc (NASDAQ:ARM), which has more than doubled since its re-listing a year ago, recently fell from $188 to $125 but got a boost after reports confirmed its chips are used in the new iPhone 16. Cramer believes the recent price dip presents a buying opportunity, emphasizing that ARM Holdings plc (NASDAQ:ARM)’s technology is crucial in mobile devices and data centers.
“Don’t forget about ARM Holdings plc (NASDAQ:ARM), the 7-nanometer kingpin whose stock has more than doubled since it came public again roughly a year ago. That’s despite pulling back from $188 in early July to $125 today. ARM Holdings plc (NASDAQ:ARM) got a nice boost today on now-confirmed reports that its chip designs are being used in the just-launched iPhone 16. The processor is built on their architecture—that’s not a shocker, but some people don’t understand that.
On Friday, many were buzzing about the relentless decline in semiconductor firm Arm Holdings. The stock fell from $123 down to $117, and this was after already coming down from $132 at the end of the previous week. Arm seemed spent, done. Then, today, it shoots back up to $125—up 7%, supposedly because the new iPhone is using their latest design for custom processors. Something that should have been obvious to everyone for months! Was Friday’s sell-off based on pure emotion, and today’s rally just emotion right back? Or did nothing truly happen at all to Arm on either Friday or Monday?
ARM Holdings plc (NASDAQ:ARM) is unique in that it designs semiconductor architecture, licenses it out to chipmakers, and collects royalties on their sales. This gives them a nice, predictable revenue stream. Their technology is firmly entrenched in data centers, mobile devices, and even the CPU portion of NVIDIA Corporation (NASDAQ:NVDA)’s top AI platforms. They’ll be big winners from a new smartphone upgrade cycle fueled by all this new AI functionality.
There’s a reason Apple Inc. (NASDAQ:AAPL) went with ARM Holdings plc (NASDAQ:ARM)’s architecture—they dominate the mobile space. Again, I’d be a buyer into the recent weakness because I think the long-term upside potential is enormous, and I don’t mind that it’s up that much today. It can go further.
Here’s the bottom line: it’s time to fall back in love with semiconductors. Some of the most beaten-down chip stocks have been punished enough, and now you’re finally getting a chance to buy ARM Holdings plc (NASDAQ:ARM) and Micron Technology, Inc.(NASDAQ:MU) at a discount.”
ARM Holdings plc (NASDAQ:ARM) is an attractive investment due to its strong financial performance and strategic role in the tech industry. In Q1 FY2025, ARM Holdings plc (NASDAQ:ARM) reported earnings per share of $0.40, beating the expected $0.34, and revenue of $939 million, which was higher than the forecast of $903.57 million. This growth, a 3.92% increase over estimates, is mainly due to rising royalty revenue from ARM Holdings plc (NASDAQ:ARM)’s Armv9 technology.
ARM Holdings plc (NASDAQ:ARM)’s partnership with Apple Inc. (NASDAQ:AAPL) further boosts its prospects, as the upcoming iPhone 16 will feature ARM’s chips, highlighting ARM’s key role in mobile and AI technology. This partnership has already driven a 60% increase in ARM Holdings plc (NASDAQ:ARM)’s stock in 2024, with investors expecting continued growth in royalty revenues.
