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Zacks Rank #3 (Hold) stock ARM Holdings is a dominant player in the semiconductor industry due to its energy-efficient designs, which are critical to the function of smartphones, laptops, and AI servers. Last night, President Donald Trump announced new investments in an AI infrastructure project dubbed “Stargate” that should act as a bullish catalyst for the stock moving forward. In fact, Wall Street tech analyst Dan Ives commented, "We believe this is the start of a wave of massive AI investments ($1 trillion more) to take place in the US.”
What Is “Stargate”?
Stargate is a $500 billion infrastructure initiative that is supported by the Trump administration. ARM has partnered with some of the world’s foremost AI companies, including OpenAI, Nvidia, Oracle and Microsoft. Stargate aims to build a next-generation “AI supercomputer data center.” With such strong partners and the backing of Pennsylvania Avenue, Stargate should act as a bullish catalyst for ARM for several quarters to come.
Strong Industry Group
The general market’s direction and a stock’s industry group are the most critical high-level ingredients to weigh when looking at a stock. 75% of stocks follow the market’s direction. With U.S. equities at all-time highs, it’s impossible to argue that equities are not in a bull market phase. Investors also want to track the top industries because industry group rank because birds of a feather flock together. ARM is a member of the Zacks “Technology Services” industry, which ranks in the top 27% of industries tracked by Zacks.
Sound Fundamental Backdrop
Though ARM shares have come down to Earth after an explosive debut, the company’s fundamentals are very much intact. In 2024, ARM delivered annual earnings that grew 97% year-over-year. Meanwhile, ARM has eclipsed Zacks Consensus Estimates for five quarters in a row since going public, with an average positive surprise of ~18%.
Bullish Chart Pattern
The easiest way to find the next stock to double is to look for stocks that already have. ARM is up more than 100% since its IPO in late 2023. After a long and frustrating consolidation, ARM is poised to rotate on its long-term quarterly chart. As a result, the stock should see a pre-earnings run, and should the company continue to deliver positive earnings, an eventual return to all-time highs.
Bottom Line
With a fresh bullish catalyst and Washington DC’s blessing, Arm Holdings has all the attributes of a potential big winner.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights ARM Holdings, Nvidia, Oracle and Microsoft
For Immediate Release
Chicago, IL – January 23, 2025 – Today, Zacks Investment Ideas feature highlights ARM Holdings (ARM - Free Report) , Nvidia (NVDA - Free Report) , Oracle (ORCL - Free Report) and Microsoft (MSFT - Free Report) .
Buy ARM Amid Stargate Announcement
Zacks Rank #3 (Hold) stock ARM Holdings is a dominant player in the semiconductor industry due to its energy-efficient designs, which are critical to the function of smartphones, laptops, and AI servers. Last night, President Donald Trump announced new investments in an AI infrastructure project dubbed “Stargate” that should act as a bullish catalyst for the stock moving forward. In fact, Wall Street tech analyst Dan Ives commented, "We believe this is the start of a wave of massive AI investments ($1 trillion more) to take place in the US.”
What Is “Stargate”?
Stargate is a $500 billion infrastructure initiative that is supported by the Trump administration. ARM has partnered with some of the world’s foremost AI companies, including OpenAI, Nvidia, Oracle and Microsoft. Stargate aims to build a next-generation “AI supercomputer data center.” With such strong partners and the backing of Pennsylvania Avenue, Stargate should act as a bullish catalyst for ARM for several quarters to come.
Strong Industry Group
The general market’s direction and a stock’s industry group are the most critical high-level ingredients to weigh when looking at a stock. 75% of stocks follow the market’s direction. With U.S. equities at all-time highs, it’s impossible to argue that equities are not in a bull market phase. Investors also want to track the top industries because industry group rank because birds of a feather flock together. ARM is a member of the Zacks “Technology Services” industry, which ranks in the top 27% of industries tracked by Zacks.
Sound Fundamental Backdrop
Though ARM shares have come down to Earth after an explosive debut, the company’s fundamentals are very much intact. In 2024, ARM delivered annual earnings that grew 97% year-over-year. Meanwhile, ARM has eclipsed Zacks Consensus Estimates for five quarters in a row since going public, with an average positive surprise of ~18%.
Bullish Chart Pattern
The easiest way to find the next stock to double is to look for stocks that already have. ARM is up more than 100% since its IPO in late 2023. After a long and frustrating consolidation, ARM is poised to rotate on its long-term quarterly chart. As a result, the stock should see a pre-earnings run, and should the company continue to deliver positive earnings, an eventual return to all-time highs.
Bottom Line
With a fresh bullish catalyst and Washington DC’s blessing, Arm Holdings has all the attributes of a potential big winner.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.