Arm Holdings plc (NASDAQ:ARM) is a top AI stock favored by analysts like Raymond James, who see promise in the company’s data center sector growth. With a 97.39% gross profit margin and over $4 billion in annual revenue, Arm Holdings is making waves in the tech industry.

Data centers make up 20% of Arm Holdings’ sales, with major clients like Amazon, Google, and Microsoft. Loop Capital raised Arm Holdings’ price target to $180, impressed by a 21% increase in royalty revenue. Arm Holdings designs CPU architecture licenses for everything from smartphones to data centers, licensing to companies like Apple and Nvidia.

While Arm Holdings shows potential, some AI stocks may offer greater returns with less risk. For those seeking undervalued AI stocks, consider exploring other options. Arm Holdings’ success lies in its licensing business model and strategic partnerships in the tech industry.

Read more at Yahoo Finance: Wall Street Bullish on Arm Holdings plc (ARM) amid AI and Data Center Opportunity