Posted 2/19/2024, 11:05:38 AM
ARM Holdings Soars on AI and Future Computing Potential Despite Stretched Valuation
- ARM Holdings shares have surged recently amid enthusiasm around its role in AI and future computing
- The company licenses CPU architecture and collects royalties, an asset-light business model
- Q3 results were decent but commentary pointed to growth acceleration from adoption of Armv9 and AI
- Valuation has shot up to 37x sales, over 100x earnings on expectations of stronger growth
- Trading action seems speculative given limited float and growth not yet realized, but long-term potential is vast