Arm Holdings does not sell chips, it develops CPU architecture and IP that it licenses to its clients. We believe Arm will remain the dominant architecture in smartphone CPUs, where it has a 99% market share, while maintaining high market share in other mobile chips and battery-powered devices. Arm is also making inroads into the data center, where we expect it will gain market share versus x86, the dominant architecture.
We expect Arm will keep gaining market share in the data center from x86 architecture, as its chips consume less power and data centers need to minimize energy consumption. We also expect share gains in automotive thanks to the transition to electric vehicles.
If Arm manages to charge royalties on a per-device basis, or if it were to meaningfully increase its royalty rates per chip, it could become a double-edged sword. Too much royalty revenue may encourage customers to adopt open-source RISC-V instead.
|
Metric
|
ARM
|
INTC
|
CDNS
|
|---|---|---|---|
Price/Earnings (Normalized) | 129.15 | 24.59 | 64.01 |
Price/Book Value | 31.49 | 1.24 | 24.57 |
Price/Sales | 51.79 | 2.37 | 21.55 |
Price/Cash Flow | 130.29 | 7.60 | 61.54 |
|
Metric
|
ARM
|
INTC
|
CDNS
|
|---|---|---|---|
Quick Ratio | 2.68 | 0.91 | 0.96 |
Current Ratio | 2.79 | 1.57 | 1.32 |
Interest Coverage | — | 0.87 | 35.75 |
|
Metric
|
ARM
|
INTC
|
CDNS
|
|---|---|---|---|
Return on Assets (Normalized) | 18.69% | 2.83% | 25.27% |
Return on Equity (Normalized) | 28.36% | 5.22% | 43.05% |
Return on Invested Capital (Normalized) | 25.25% | 3.23% | 35.56% |
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1-Day Chart
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Name
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Price
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Morningstar Rating for Stocks
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Capital Allocation
|
Economic Moat
|
Market Cap
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