Investors were not impressed with the company's latest quarterly report, but they should not miss the bigger picture.Arm Holdings (ARM -3.43%) stock shot up big-time earlier this year following the release of its fiscal 2024 third-quarter results in February, which was not surprising, as management pointed out that the growing demand for artificial intelligence (AI) chips is turning out to be a catalyst for its business. However, things have been going downhill for the British chip designer since then.Arm s ...

Core Viewpoint - Arm Holdings' stock has surged 8% following its fiscal year 2024 earnings report, but investment bank Bernstein argues that buying the stock post-earnings was a mistake, labeling it as overpriced and recommending a sell [1][3]. Financial Performance - Arm's fiscal 2024 sales increased by 21% to $3.2 billion, while net income fell by 43% to $0.29 per share [2]. - The fourth quarter showed significant momentum, with revenue rising by 47% and earnings increasing from $0.00 per share to $0.21 per share year-over-year [2]. - Management has guided for approximately 22% sales growth in fiscal 2025, with non-GAAP earnings expected to grow similarly to about $1.55 per share [2]. Valuation Concerns - Bernstein noted that while Arm's guidance was considered "strong," it did not exceed expectations and lacked the "beat and raise" that investors were hoping for [3]. - The stock is trading at an extraordinary valuation of 388.5 times trailing earnings, which Bernstein argues does not justify the anticipated 22% growth rate [3]. - Bernstein has raised its price target to $92 but maintains a sell recommendation, emphasizing that Arm's stock is significantly overpriced [3].

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Core Viewpoint - Semiconductor stocks are currently at the forefront of financial discussions, particularly due to the focus on artificial intelligence, with several companies showing strong performance and growth potential in this sector [1]. Group 1: Nvidia Corp (NASDAQ: NVDA) - Nvidia is highlighted as a leading semiconductor stock, with shares nearly doubling since the start of 2024, and expectations for further growth [2]. - The company reported a revenue increase of over 300% to $22 billion in Q4, with projections of $24 billion for the current quarter, driven by AI demand [2]. - Analyst Blayne Curtis from Jefferies maintains a "buy" rating, predicting the stock could reach $1,200 per share [2]. Group 2: Qualcomm Inc (NASDAQ: QCOM) - Qualcomm's net income rose by 37% in the second quarter, making it a strong candidate for quick returns [3]. - The company provided guidance for the current quarter that exceeded market expectations and offers a dividend yield of 1.75% [4]. - Qualcomm ended its last fiscal year with over $11 billion in cash equivalents, ensuring the sustainability of its dividend payments [4]. - The stock has increased by more than 40% since the beginning of 2024 [4]. Group 3: Arm Holding PLC (NASDAQ: ARM) - Arm is recognized for its technology that powers nearly all smartphones globally, making it a valuable semiconductor stock [5]. - Shares are currently down approximately 25% from their year-to-date high in February, presenting a potential buying opportunity [5]. - The company reported a 47% annualized growth in Q4 revenue and anticipates launching its own AI chips in 2025 [5]. Group 4: Taiwan Semiconductor (NYSE: TSM) - Taiwan Semiconductor is noted for its critical role in the AI sector, with analysts stating that "all AI roads must go through" TSM [6]. - The company expects a revenue rebound of about 23% and a 19% increase in EPS for the year following a weaker 2023 [6]. - TSM reported a 60% year-over-year increase in sales for April, amounting to NT$236 billion [6]. - The stock also offers a dividend yield of 1.60% [6].

Shares of the CPU architecture specialist pulled back following its latest earnings report. Is it a buying opportunity?Arm Holdings (ARM -0.49%) has only been public for eight months, but the semiconductor stock is already making waves in the stock market.Arm attracted a ton of attention in February when the stock skyrocketed on its fiscal third-quarter results after the company made it clear that it would play a significant role in the artificial intelligence (AI) boom.Shares nearly doubled in just three s ...

Arm Holdings may be preparing to enter the AI Chip market.In today's video, I discuss recent updates impacting Arm Holdings (ARM -0.55%). Check out the short video to learn more, consider subscribing, and click the special offer link below.*Stock prices used were the after-market prices of May 13, 2024. The video was published on May 13, 2024. ...

Wall Street's finest are bullish on two supercharged chip stocks not named Nvidia.Let's address the elephant in the room: When it comes to artificial intelligence (AI), no one's going to forget Nvidia (NVDA 0.58%). I know I certainly won't. The company is the standard bearer for the accelerating adoption of AI thanks to its gold standard AI chips and has thus far been the one undisputed beneficiary of the AI revolution. The stock price has gained more than 200% over the past year alone, led by triple-digit ...

Arm is finally finding its way into the data center, but the stock is priced for perfection.Arm Holdings' (ARM 7.71%) earnings report last week was a bit of a mixed bag. While Arm beat analyst expectations for both revenue and earnings, the chip company's outlook for fiscal 2025 fell a bit short of the consensus estimate. Arm expects to generate revenue of $3.95 billion for the full year, plus or minus $150 million, a hair below the $3.99 billion analysts anticipated.Arm stock initially tumbled following th ...

Buying these beaten-down chip stocks could help you profit from the AI revolution.Artificial intelligence (AI) is changing the world at an incredible pace, and its earthshaking impacts are still just beginning to unfold. The rapid evolution of this new category of software is poised to influence nearly every industry imaginable, and is being made possible by advanced semiconductors.Most notably, the rise of AI has powered incredible stock gains for Nvidia -- the leading designer of graphics processing units ...

Apple (NASDAQ:AAPL) is best known for its consumer electronic products that develop a cult-like following. In fact, the tech stock is a formidable chipmaker. The very first in-house chip appeared in the iPhone 4 way back in 2010. Yet today, all Apple computers run on their own processors.Apple’s chips are for its own consumption though. They don’t sell them to others. And because it relies upon its own designs, it is no longer beholden to other chipmakers for supply. Now Apple isn’t a foundry. It doesn’t ph ...