From Nasdaq: 2024-05-21 07:30:00

1. Nvidia (NASDAQ: NVDA) has seen significant growth due to high demand for GPUs driven by the AI arms race. Arm Holdings (NASDAQ: ARM) may challenge Nvidia’s dominance in AI due to energy-efficient designs. Google and Microsoft are developing Arm-based products that could impact Nvidia’s GPU sales.

2. Arm’s revenue grew 47% YoY in Q4 2024 to $928 million, with strong margins and free cash flow. However, with a pricey stock trading at 73 times forward earnings, Arm may struggle to challenge Nvidia’s market dominance. Nvidia holds $147 million in Arm stock and collaborates with Arm to create innovative products.

3. Despite the potential threat, Arm Holdings may not dethrone Nvidia anytime soon. Arm’s stock is expensive, making it less attractive for investors. The Motley Fool’s Stock Advisor team does not include Arm Holdings in their top 10 stock picks, highlighting the uncertainty surrounding Arm’s ability to deliver significant returns.

4. Suzanne Frey of Alphabet is on The Motley Fool’s board, with Keithen Drury holding positions in Alphabet. The Motley Fool recommends Alphabet, Microsoft, and Nvidia, emphasizing the dynamic landscape of AI technology companies. With Arm’s growing presence, investors must evaluate the risks and rewards of investing in Arm Holdings.



Read more at Nasdaq: Could ARM Holdings Dethrone Nvidia?