ARM Holdings stock has dropped 33% in the last month due to weak economic data, negative industry trends, and concerns about key customers Nvidia and Apple.

From Nasdaq: 2024-08-12 13:42:00

ARM Holdings plc shares have declined significantly in the past month, dropping 33.4%, outpacing the broader industry’s 10.1% decline. The stock is 2.5% lower over six months but still up 55.7% year-to-date. Recent weak economic data and concerns of a recession have led to the drop, compounded by news about key customers Nvidia and Apple.

ARM is a leader in AI, with innovative chip designs prized by major companies like Apple and Nvidia. Its v9 architecture and processor platforms position it well for sustained growth in AI technology. Despite challenges in IoT and networking, ARM’s royalty revenues are expected to see a boost, indicating strong overall prospects.

Analysts foresee strong earnings and sales growth for ARM in fiscal 2025 and 2026. However, the stock remains pricey, trading at 67 times forward earnings and 133 times trailing EV-to-EBITDA ratio. Investors may want to wait for a better entry point despite the company’s long-term growth potential in the AI hardware market.

Zacks has identified a new semiconductor stock with high growth potential in AI, machine learning, and IoT to capitalize on the booming semiconductor market. Global semiconductor manufacturing is projected to nearly double by 2028. Investors seeking exposure to this sector can explore this opportunity further.



Read more at Nasdaq: Arm Holdings (ARM) Down 33% in a Month: Should You Buy the Dip?