Arm Holdings Is A 'Strong AI Play' But Not A Buy, Analyst Says
Portfolio Pulse from Priya Nigam
Arm Holdings is considered a strong AI play but is not recommended for buying due to high growth expectations already being priced in. The company has a hold rating from Benchmark, with no price target set. Arm's stock trades at twice the forward multiples of its AI peers.
September 16, 2024 | 2:35 pm
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NEUTRAL IMPACT
Apple's iPhone 16 will use Arm's V9 architecture, but its AI strategy is described as 'piece-meal'. This may affect investor sentiment towards Apple's AI capabilities.
While Apple's use of Arm's architecture is positive, the 'piece-meal' AI strategy may temper enthusiasm, leading to a neutral short-term impact on Apple's stock.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Arm Holdings is seen as a strong AI play but is not recommended for buying due to high growth expectations already priced in. Benchmark has given it a hold rating with no price target.
The analyst's hold rating suggests that the current stock price already reflects the company's growth potential, indicating limited short-term upside. The stock's decline by 4.92% reflects market sentiment aligning with this view.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
POSITIVE IMPACT
Arm's stock trades at twice the forward multiples of AMD, suggesting AMD may be undervalued in comparison.
The comparison suggests AMD may be undervalued relative to Arm, potentially leading to positive sentiment and a slight upward pressure on AMD's stock.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
POSITIVE IMPACT
Arm's stock trades at twice the forward multiples of Broadcom, indicating Broadcom may be undervalued in comparison.
The comparison suggests Broadcom may be undervalued relative to Arm, potentially leading to positive sentiment and a slight upward pressure on Broadcom's stock.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
POSITIVE IMPACT
Arm's stock trades at twice the forward multiples of Marvell Technology, suggesting Marvell may be undervalued in comparison.
The comparison suggests Marvell may be undervalued relative to Arm, potentially leading to positive sentiment and a slight upward pressure on Marvell's stock.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30
POSITIVE IMPACT
Arm's stock trades at twice the forward multiples of Nvidia, indicating Nvidia may be undervalued in comparison.
The comparison suggests Nvidia may be undervalued relative to Arm, potentially leading to positive sentiment and a slight upward pressure on Nvidia's stock.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 30