Arm Has Ambitions to Be the Next Nvidia. Why It’s Unlikely to Get a Similar Valuation.

Arm Holdings is set to be the market’s next big chip stock as it gears up for its public listing. Arm has yet to prove that it is the next Nvidia and shouldn’t be priced like it.

That would be a hefty valuation for a company that generated $2.68 billion of revenue in its most recent fiscal year and net income of $524 million, implying a price-to-earnings ratio of around 122 times. Whereas Nvidia sells graphics-processing units which have become the tool of choice for training AI systems in data centers, Arm’s core strength is licensing designs for central processing units, or CPUs and is heavily exposed to the smartphone market. It’s not clear how far or quickly the wave of AI spending will translate to spending on higher-end chips for devices such as computers and smartphones.

Technology Technology Latest News, Technology Technology Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Arm Has Ambitions to Be the Next Nvidia. Why the Battle for AI Is Key.Arm Holdings is preparing for its IPO and the model for its success will be Nvidia - an AI chip favorite. But there are potential concerns about Arm's...
Source: MarketWatch - 🏆 3. / 97 Read more »

How Nvidia's AI Strategy Fueled Its $1 Trillion ValuationChip maker Nvidia broke into the exclusive club of companies that have a $1 trillion market cap. WSJ’s Asa Fitch breaks down how Nvidia got there—and why AI is
Source: WSJ - 🏆 98. / 63 Read more »

Nvidia earnings will be major test for AI demand, market rally By ReutersNvidia earnings will be major test for AI demand, market rally
Source: Investingcom - 🏆 450. / 53 Read more »