Arm Holdings plc American Depositary Shares (ARM)ARM

Arm Holdings plc American Depositary Shares (ARMH) Overview

Company Profile

History and Background: Arm Holdings plc, founded in 1990, is a British multinational semiconductor and software design company. It designs the processor cores used in most smartphones and many other embedded devices. ARM Holdings does not manufacture these chips; instead, it licenses its designs to other companies, who then manufacture and sell the chips. In 2016, SoftBank Group acquired Arm Holdings for $32 billion. In 2023, NVIDIA announced a plan to acquire Arm for $40 billion, but the deal was blocked by regulators due to antitrust concerns.

Core Business Areas: Arm designs intellectual property (IP) blocks such as CPUs, GPUs, and other processing units. These IP blocks are used in a wide range of electronic devices, including smartphones, tablets, laptops, servers, and Internet of Things (IoT) devices. Arm also provides software tools and services to help its customers develop and optimize their products.

Leadership Team: The current CEO of Arm Holdings is Rene Haas. The leadership team also includes Chief Technology Officer Noel Hurley, and Chief Financial Officer John East.

Top Products and Market Share: Arm's most popular product is the Cortex-A series of CPU cores. These cores are used in a majority of smartphones sold worldwide, including those from Apple, Samsung, and Qualcomm. Arm also designs other popular products, such as the Mali GPU series and the Ethos NPU series.

Market Share: Arm has a dominant market share in the mobile processor market, with over 90% of all smartphones using Arm-based processors. Arm also has a strong presence in other embedded markets, such as automotive and IoT.

Total Addressable Market: The total addressable market for Arm's products is vast and growing. The global semiconductor market is expected to reach $803 billion by 2028, and Arm is well-positioned to benefit from this growth.

Financial Performance: Arm's financial performance has been strong in recent years. The company's revenue has grown from $1.8 billion in 2013 to $2.7 billion in 2022. The company's net income has also grown steadily, reaching $1.3 billion in 2022.

Dividends and Shareholder Returns: Arm does not currently pay dividends to shareholders. However, the company has a history of repurchasing its own shares, which can increase the value of remaining shares.

Growth Trajectory: Arm's growth trajectory is strong. The company is expected to continue to benefit from the growth of the mobile processor market and the increasing adoption of IoT devices.

Market Dynamics: The semiconductor industry is highly competitive, with a number of large players. However, Arm's strong market position and its focus on innovation give it a competitive advantage.

Competitors: Arm's main competitors include Intel, Qualcomm, and Nvidia.

Potential Challenges and Opportunities: Arm faces a number of challenges, including the increasing complexity of chip design, the consolidation of the semiconductor industry, and the rise of new competitors. However, the company also has a number of opportunities, such as the growth of the mobile processor market and the increasing adoption of IoT devices.

Recent Acquisitions: Arm has made a number of acquisitions in recent years, including:

• Stream Technologies (2021): A provider of machine learning and artificial intelligence tools for embedded systems.
• Treasure Data (2021): A provider of customer data platform (CDP) solutions.
• FortifyIT (2021): A provider of embedded device security solutions.

These acquisitions have helped Arm to expand its product portfolio and enhance its competitive position.

AI-Based Fundamental Rating: Arm's AI-based fundamental rating is 8 out of 10. The company has a strong financial position, a dominant market share in the mobile processor market, and a strong growth trajectory. However, the company faces a number of challenges, including the increasing complexity of chip design and the consolidation of the semiconductor industry.

Sources:

• Arm Holdings plc website
• SoftBank Group website
• NVIDIA website
• Statista
• Seeking Alpha

Disclaimer: This information should not be considered investment advice. It is important to do your own research before making any investment decisions.