Why Arm Holdings (ARM) is Skyrocketing in 2025?

We recently published a list of 10 Hottest Mega-Cap Stocks So Far in 2025. In this article, we are going to take a look at where Arm Holdings (NASDAQ:ARM) stands against other hottest mega-cap stocks so far in 2025.

Many mega-cap stocks have started 2025 with a bang and we’ll be taking a closer look into each of them to learn why they’ve performed so well already.

If you skim the trends in the past two years, it should be clear that it’s worthwhile to look into mega-cap stocks that have gained a lot already. Investors who defied the conventional wisdom and doubled down on the mega-cap stocks last year have outperformed the benchmark index by a wide margin.

We used a stock screener and sorted public companies — those tagged by the screener as trading in the U.S. — with a market capitalization above $100 billion by their year-to-date (YTD) gains.

Will lightning strike again this year and take these stocks even higher by the end of 2025? It’s not rational to paint all these companies with the same brush, so let’s dive into the nitty gritty of each mega-cap stock in this list.

Arm Holdings (ARM)

• YTD Total Return: 13.11%

Arm Holdings (NASDAQ:ARM) is another semiconductor company with large 2025 returns; not much of a surprise. Semiconductor firms dominated the charts last year as well. ARM stock has doubled its stock price in just the past year. This is mostly because they’ve had very strong quarter-over-quarter growth and bullish revenue forecasts.

Arm Holdings (ARM) has also pivoted into high-value areas like AI and data centers, and these have made it into a hot mega-cap performer this year. The licensing business has bought in robust royalty stream and Wall Street is bullish that Arm can continue double-digit growth over the coming quarters.

For the full fiscal year 2025 (ending March 31, 2025), Arm Holdings (ARM) reaffirmed revenue guidance of $3.8 billion to $4.1 billion, with adjusted EPS projected between $1.45 and $1.65. The company guided for some sequential moderation in certain quarters — particularly for licensing revenue — Wall Street largely interprets the annual view as a sign of at least 20% top-line growth for the year. Some sell-side estimates see Arm maintaining a 20%+ annual revenue growth rate well into fiscal 2026 and 2027.

Overall, ARM ranks 2nd on our list of hottest mega-cap stocks so far in 2025. While we acknowledge the potential of ARM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.