Is ARM an Underrated Gem in AI? |
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Hey Folks,
When people think AI, they are often focused on the biggest players...
We are talking the Microsoft and Nvidia's of the world! | | | Don't get me wrong, the logic certainly makes sense given how capital intensive the industry is, but a stock in the $1 trillion+ range has less room to grow from a valuation perspective. For this reason, the sweet spot likely lies in the large cap category... While there are plenty of good ones to choose from, one stands head and shoulders above the rest! Arm Holdings presents a compelling opportunity in the AI space despite its recent pullback. Arm's chips are pervasive, powering most smartphones, and the company is now making significant strides in high-value markets such as AI, data centers, and automotive technology. Arm has seen its stock rise more than 90% since IPOing in September 2023, showcasing strong market presence and hype potential. | | | Despite the short-term noise in July, analysts remain bullish on the stock. Morgan Stanley recently upgraded the ARM to a "buy" and raised its price target to $190 per share. This confidence is backed by the company's strong position in the AI computing sector, which is increasingly moving towards the edge in mobile, automotive, and personal computing markets. The company's microchip and semiconductor licenses generate consistent royalty income, providing a solid foundation for future earnings growth. Moreover, the inclusion of Arm Holdings in the Nasdaq 100 index further solidifies its status as a key player in the tech sector. | | | Looking ahead, Arm's focus on AI, data centers, and automotive technology places it at the forefront of several high-growth industries. As these sectors expand, Arm's role as a critical technology provider will likely strengthen. The company's ability to innovate and adapt its business model to focus on higher-value markets should drive substantial revenue growth over the long term. It's important to keep in mind that that the stock market is forward looking... | | | This means that we don't need any of this "value" to be realized in order for ARM to do well in the coming months. Ultimately, it comes down to how much investors and speculators are buying into the story.....and in our view, it's an incredibly compelling one. Anyways! That's all for now...
Until Next Time, -Damian | P.S. Want our text alerts? Text "ZIPTRADER" to 1-(855)-228-1598 to sign up!
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