Posted 2/18/2024, 6:23:00 PM
ARM Holdings Stock Soars on Earnings Beat But Faces Risks from Lofty Valuation
- Arm Holdings (ARM) stock has nearly doubled after blowing away earnings expectations for last quarter
- The company is benefiting from strong semiconductor industry tailwinds, but valuation is very high
- ARM's price-to-sales ratio is similar to Nvidia's, but Nvidia is more established and growing faster
- The recent stock price surge seems driven by momentum and speculation around AI rather than fundamentals
- While ARM could be a decent long-term investment, the stock seems overvalued and risky at current prices