From Morningstar:

Arm Holdings, or ARM, went public in September 2023 at $51 per share, and the stock soared to $77.47 but has since fallen to around $72. The company holds a monopoly in smartphones and wearables, and its chips have begun to gain share in data centers and automotive markets. Arm is also in a financially healthy position, with $1.6 billion of cash on hand and no debt. The firm does not intend to pay any dividend or engage in significant M&A activities, expecting to reinvest its cash flow in R&D or share repurchases. Morningstar gives Arm shares a 2-star rating and a wide economic moat from its intangible assets and switching costs. However, the economic moat also poses risk, i.e., high uncertainty from its China exposure, with more than 20% of Arm’s business coming from China. 2022 saw a series of corporate fights at Arm China, with its CEO at the time accused of unethical behavior. Morningstar gives it a High Uncertainty Rating and a fair value estimate of $34.



Read more: After Arm’s Rally, is the Stock a Buy or Sell?