ARM Holdings' Valuation Running Ahead of Fundamentals Amid AI Hype

Key Takeaways ARM trades at 85X forward earnings, far above the semiconductor industry's 33X average. Despite 30B chip shipments, ARM earned only 13 cents in revenue and 6.5 cents royalty per chip in FY24. Earnings estimates for ARM have declined over the past 60 days despite a 28% YTD stock surge.Arm Holdings plc (ARM) has attracted immense investor attention, thanks to its perceived position at the heart of the AI revolution, given that its architecture underpins a vast number of chips used in everythin ...