We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Rank #3 (Hold) stock Arm Holdings is a British software design company that is a foundational architect for the modern technological era. Unlike traditional semiconductor stocks like NVIDIA or Advanced Micro Devices, which design physical chips, ARM’s business focuses on designing the blueprints (processor architecture).
Then, rather than producing the chips themselves, ARM licenses its architecture to major technology companies, including NVIDIA, Apple and Qualcomm. ARM’s RISC-based (Reduced Instruction Set Computing) processor is known for producing some of the most energy-efficient technology and is used in most of the world’s most popular consumer electronic devices, such as the Apple iPhone.
ARM Holdings: A High Margin, Asset-Light Business
Because of ARM’s unique, asset light business model, the company enjoys a high-margin business. ARM collects upfront fees and royalties on every chip containing its technology. In other words, ARM has the holy grail for a fundamentally strong company – low costs and a recurring revenue stream that is independent of manufacturing expenses. ARM’s 97.5% gross margin (total revenue – cost of goods sold) is exceptional.
Meanwhile, the company’s margins are likely to only expand from here. ARM’s latest Armv9 architecture is experiencing heavy demand and higher royalty rates per chip, especially in the booming premium smartphone and data center businesses.
ARM Announces First In-house AI-Focused Chip
Although ARM’s business is already strong, the company announced Tuesday that it will be releasing its own AI-focused data center chip. The chip will focus on powering Agentic AI in data centers. Agentic AI is currently the fastest-growing area of the AI industry. Adding credence to the new chip’s potential is the fact that Meta Platforms has agreed to be the “anchor customer” for the new chip. CEO Rene Haas indicated that the new data center chip will ignite revenue growth. In fact, Haas predicts that the new data center chip business could generate ~$15 billion in annual revenue in “about five years.”
Considering that ARM’s 2025 annual revenue was roughly $4 billion, any revenue performance near the CEO’s prediction would be spectacular. Zacks Consensus Estimates suggest that ARM will grow revenue by ~20% over the next few years. However, I expect that Wall Street will be forced to raise forward estimates in the coming months as they factor in the large potential of an in-house chip.
ARM News Produces Episodic Pivot
An episodic pivot is a technical analysis pattern that occurs when a stock gaps up significantly on heavy trading volume in response to a major fundamental catalyst. ARM’s 15% gap on massive volume (5x the norm), coupled with the new chip catalyst, means that Wednesday’s gap up is buyable.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
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.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Shutterstock
Zacks Investment Ideas feature highlights: Arm Holdings, NVIDIA, Advanced Micro Devices, Apple, Qualcomm and Meta Platforms
For Immediate Release
Chicago, IL – March 26, 2026 – Today, Zacks Investment Ideas feature highlights Arm Holdings (ARM - Free Report) , NVIDIA (NVDA - Free Report) , Advanced Micro Devices (AMD - Free Report) , Apple (AAPL - Free Report) , Qualcomm (QCOM - Free Report) and Meta Platforms (META - Free Report) .
Why ARM's New AI Chips Are a Game-Changer
What Does Arm Holdings Do?
Zacks Rank #3 (Hold) stock Arm Holdings is a British software design company that is a foundational architect for the modern technological era. Unlike traditional semiconductor stocks like NVIDIA or Advanced Micro Devices, which design physical chips, ARM’s business focuses on designing the blueprints (processor architecture).
Then, rather than producing the chips themselves, ARM licenses its architecture to major technology companies, including NVIDIA, Apple and Qualcomm. ARM’s RISC-based (Reduced Instruction Set Computing) processor is known for producing some of the most energy-efficient technology and is used in most of the world’s most popular consumer electronic devices, such as the Apple iPhone.
ARM Holdings: A High Margin, Asset-Light Business
Because of ARM’s unique, asset light business model, the company enjoys a high-margin business. ARM collects upfront fees and royalties on every chip containing its technology. In other words, ARM has the holy grail for a fundamentally strong company – low costs and a recurring revenue stream that is independent of manufacturing expenses. ARM’s 97.5% gross margin (total revenue – cost of goods sold) is exceptional.
Meanwhile, the company’s margins are likely to only expand from here. ARM’s latest Armv9 architecture is experiencing heavy demand and higher royalty rates per chip, especially in the booming premium smartphone and data center businesses.
ARM Announces First In-house AI-Focused Chip
Although ARM’s business is already strong, the company announced Tuesday that it will be releasing its own AI-focused data center chip. The chip will focus on powering Agentic AI in data centers. Agentic AI is currently the fastest-growing area of the AI industry. Adding credence to the new chip’s potential is the fact that Meta Platforms has agreed to be the “anchor customer” for the new chip. CEO Rene Haas indicated that the new data center chip will ignite revenue growth. In fact, Haas predicts that the new data center chip business could generate ~$15 billion in annual revenue in “about five years.”
Considering that ARM’s 2025 annual revenue was roughly $4 billion, any revenue performance near the CEO’s prediction would be spectacular. Zacks Consensus Estimates suggest that ARM will grow revenue by ~20% over the next few years. However, I expect that Wall Street will be forced to raise forward estimates in the coming months as they factor in the large potential of an in-house chip.
ARM News Produces Episodic Pivot
An episodic pivot is a technical analysis pattern that occurs when a stock gaps up significantly on heavy trading volume in response to a major fundamental catalyst. ARM’s 15% gap on massive volume (5x the norm), coupled with the new chip catalyst, means that Wednesday’s gap up is buyable.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
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.